Elon Musk is once again offering to acquire Twitter Inc. TWTR.
Some investors may have profited early from the news, after the announcement sent shares of the social media platform soaring.
What Happened: On Tuesday, Musk said he intends to acquire Twitter at the originally agreed-upon price of $54.20. The proposal was confirmed by Twitter, which saw its shares halted with news pending.
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Carl Icahn, who bet on Twitter in the $30 s, could have made a profit of $250 million on the news from Twitter and Musk. Options traders could have profited big.
Options activity in stocks can indicate big moves of the common shares, something that is tracked by Unusual Whales on Twitter with options data and a tagline of follow the flow. On Sept. 29, Twitter had 11,000 in new volume for $45 call options with an expiration date of Oct. 14. The shares traded between $42.39 and $43.11, below the $45 strike price for the entire day.
After the halt on shares ended, the shares of Twitter went up to over $50.
Unusual Whales reported that a new volume came in on these same options with interest of around 14,000. The options price went up around 3,000% after the announcement was made on Twitter.
Unusual Whales tweeted. I do not do callouts, but my systems picked it the bullish moves up. On Tuesday, Twitter had heavy options activity due to the news with the $55 call options expiring on Jan. 20, 2023, which saw interest of 158,404, according to Unusual Whales.
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Why It is Important: The large options activity last week could signal that someone knew that Musk was submitting a new proposal to Twitter. It is possible that someone placed a large bet that Musk would renegotiate a lower deal price prior to the Oct. 17th date that the trial of Twitter vs. Elon Musk is about to begin.
As noted by Benzinga, tweets from Musk can often move stocks and cryptocurrencies.
Options activity in stocks related to Musk this year has been a bit unusual.
Musk made headlines earlier this year for joking that he was buying the English Premier League team Manchester United MANU, which is publicly traded.
Prior to his tweet about Manchester United, options activity in the public soccer team was larger than normal.
Two days prior to the tweet, a trader placed a call sweep on 30,000 options with a strike price of $14 and an expiration date of Sept. 16, 2022. The price of Manchester United would go up soon, and the trade was a six-figure bet.
Options activity in Manchester United increased by 3,500% on the date in question, according to unusual whales. The options bet was very profitable for the trader and will go down as unusual.
On Wednesday, the TWTR Price Action: Twitter shares were down 1% to $51.32.