MAXN (1.47) PUTs are selling at extreme premiums ..... I sold a few of the July $1.50 PUTs for $1.09 .... so the break even is $0.41 per share.
Maxeon Solar Technologies reported a big Q1 loss and needed a big cash infusion to stay afloat and the cost of severe dilution .... but the news is out and I don't understand the rationale for the extreme high PUT premiums, unless traders expect the company to be delisted and taken private ??? I'm curious to see how it plays out .... the most I can lose is $0.41 per share versus a potential gain of $1.09. Just fun money though, since it's a money losing junk stock with massive dilution just ahead.
PR -
"TZE has agreed to invest $97.5 million via a debt investment and has committed to an additional $100 million equity investment, in each case subject to regulatory approvals. In addition, substantially all of the holders of the $200 million 2025 convertible notes have agreed to exchange their bonds and accrued interest into new bonds due in 2028, which are convertible into equity at the noteholders' option starting July 2nd and $137.2 million of which must be converted into equity upon TZE's equity investment. We believe that these transactions are necessary to provide sufficient liquidity to enable the Company to return to profitability. These transactions, however, will result in substantial dilution to existing public shareholders, with TZE ultimately becoming a controlling shareholder, subject to regulatory approvals."
AI
