Dark Money Sell Alert: Take 14% Gains on L Brands Calls

LB stock had been rising steadily until an abrupt decline this morning on news that the board will move ahead with a tax-free spinoff of Victoria’s Secret as a separate public company. When complete, current shareholders will own a lower-priced stock in LB, plus they will receive what is essentially a large one-time dividend of shares in the new public company. This should cause a large, automatic adjustment to LB call options by August. Considering all this, we recommend locking in a solid gain on your position.

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Dan Amoss

Dan Amoss, CFA, tracks aggressive accounting and other red flags that markets miss. He’s a student of the Austrian School of economics and Daily Reckoning fan since 2000. Agora Financial relies on Dan for macro market commentary as well as profitable plays like his 2008 call to readers to buy Lehman Bros. puts, which...

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