When it comes to the wonderful world of online auctions, there is no company with more power than eBay Inc (NASDAQ:EBAY). With this in mind, many continue to wonder when its stock price is going to take off. One such person may be Carl Icahn.
When you look back at how eBay performed in 2013, it is easy to see how it lagged behind many of its internet based peers. In fact, when you look back at the past year you will see that the stock was stuck between $55 and $58.
In a recent CNBC video, the topic of eBay stock came up with the host taking a close look at a purchase, during the lows of the year, when somebody looked out to July and they bought 50,000 of the July 65 call spread.
The video goes on to talk about how Icahn was looking at the company during the time that this purchase happened. For this reason, as many others would assume, he had to be the one that made this play.
Then in November and December, there was more of the same. There were 50,000 call options purchased on December 26 along with 32,000 purchased on January 14, which was only a couple weeks back.
Here is the most interesting note from the video, as spoken by the host: “As the stock languished over the past year, option open interest would flat line just like this. And then all of a sudden we see this huge spike of interest, and obviously it has to do with those big call purchases.”
While not many believe that Icahn was involved in the short dated stuff, when you take a longer view of what is going on, looking out to July, this is when it makes more sense that he could have been the one involved.
This is an interesting story that is well worth keeping an eye on as the next few months go by and more information is leaked. Nobody knows for sure if Icahn is the one who was doing the bidding on eBay calls, but there is plenty of speculation. What are your thoughts on this? If it was Icahn, do you agree with this move?