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Wednesday, January 5, 2011

Chasing Takeover Rumors...chasing a greased HOG

By Steve Sears

The takeover rumors are back in the options market. The re-emergence at a time when the stock market is laboring to advance is not mere coincidence. Rest assured that rumor mongers are pushing junk just as they are worried about their own investment returns. This is why perennial takeover target Harley-Davidson (HOG) is back.

Add Focus Media (FMCN) to the list. And Rackspace (RAX) and Thompson Creek (TC). All the rumortrage names are backed by unusual options trading volumes, and a hiccup of credibility.

Atheros (ATHR) was rumored Monday to be a Qualcom (QCOM) takeover target, and indeed that did prove true.

The exchanges and Securities and Exchange Commission need to investigate the rash of takeover trading in the options market. It is a black eye for the market. Everyone who trades knows how easy it is to start a takeover rumor.

There are even websites that everyone uses to track takeovers and traffic in rumors. If you view the takeover rumors like lottery tickets, so be it.

If not, be careful because if you’re sitting at the poker table and you don’t know who the fool is it’s you. More Steven Sears Articles

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