Unusual Options Activity In Caesars Entertainment Corp

Last year, Tilman Fertitta, owner of restaurant company Landry’s Inc. and the NBA’s Houston Rockets, offered $13 a share in cash and stock for the company.

In January, activist / investor Carl Icahn built a 10% stake in Caesars Entertainment Corp. Now Icahn’s is pushing for a sale of the company after Caesars rejected a merger approach by Tilman Fertitta.

The activist investor said in a filing with the Securities and Exchange Commission that he wants representation on Caesars’ board and for the company to refrain from immediately appointing a new CEO.

Caesars’ stock is undervalued and the best way to boost it would be to sell the company, Icahn’s filing states. Shares of the Las Vegas-based company jumped more than 5 percent Tuesday.

“We believe that our brand of activism is well suited to the situation at Caesars, which requires new thought, new leadership and new strategies,” the filing adds.


Maybe, just maybe this is why I noticed unusual options activity on Friday. The Smart Money is piling into the March $9 and $9.50 call options. And based on the open interest, they have been buying these call options for quite some time. The Smart Money must know something we don’t because these are short dated options expiring in less than 30 days.

And according to the daily chart, there is no reason why the stock price can’t surpass $10 within the next several weeks as the closes level that would stop price is the daily supply at $12.15.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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