Monday, November 12, 2007

Trading on BHP Raises Questions (Rio Tinto, RTP)

From the Wall Street Journal Online:
...Thursday's trading wasn't the first clue that speculation about a possible tie-up of BHP and Rio Tinto was resurfacing. Traders had recently noticed a break in the usual pattern of trading in the two companies' shares. Because BHP and Rio Tinto are in similar lines of business, and are often buffeted by the same market forces, their shares tend to move in similar directions and to a similar degree. However, Since Nov. 1, excluding Friday, Rio Tinto's Australia-listed shares had gained 3.1% while BHP's stock price had fallen 6.2%....MORE
From The Age:
Curious times as a few Rio shareholders get the cream

So who's made millions with the inside running on BHP Billiton's attempted mega-merger with Rio Tinto?

Some lucky, or at least well-informed, sod might have hit paydirt.

On Thursday, when the market had fallen 2.6 per cent in the wake of credit scares and write-downs, Rio Tinto shares had slipped by as much as $3.61.

Then something happened. About 30 minutes before close of trade, well before the world's biggest miner fessed up that it had approached the Rio board, Rio Tinto shares suddenly moved higher....MORE

From the New York Times DealBook blog:

Who Struck Gold in Rio Tinto’s Options?
...According to Jon Najarian of, trading in call options related to Rio Tinto shares was nearly double the daily average on three days in the past two weeks. With shares of Rio Tinto up sharply Thursday, he calculated that holders of four types of Rio Tinto call options realized paper profits of more than $7 million....MORE