$BGP February Call Option Activity, Watching Borders Group News

Expect big news soon from Borders Group (BGP). Bill Ackman of Pershing Square Capital Management owns 37%, their General Counsel and Chief Information Officer resigned, they halted payments to certain vendors to refinance debt and something needs to be done about declining revenues and shareholders equity (see chart comparison since 2001 below). Articles:

*More red flags up at Borders Analysts: Chapter 11 an option; company needs a strategy, too (Crains Detroit)

*Borders Group bankruptcy filing may be inevitable, University of Michigan expert says (AnnArbor.com)

BGP closed at 0.92 on Friday and $1 call options were active from February to August. February activity was over open interest. I'm not sure what this activity means. Are investors positioning for a pop on news? Is someone hedging their short positions? Either way, hopefully something interesting happens with this company, including more land for Laptopistan. Massive retail commercial real estate space is involved here as well. See my previous post for more news and information. BGP option chain snapshots and fundamental data after the jump.

BGP February 2011 $1.0 Call (1,585 with 1,061 open) - Yahoo Finance

BGP May 2011 $1.0 Call (347 with 1,357 open) - Yahoo Finance

BGP August 2011 $1.0 Call (232 with 303 open) - Yahoo Finance

BGP Stock Chart by YCharts

Somewhat related: Howard Davidowitz's Retail Outlook, Real Estate Revolution, XRT Put Spread and Chart Levels To Watch

FYI: There's no recommendation here and no ownership stake in either direction.