Everything Options

Pogi.G said:

I have only made three options plays besides the one below. One was pfizer that I pretty much fucked myself on calls after vaccine news. I like to view it as a learning experience. The other one was Kodak when I loaded puts on the back side of that massive squeeze back in August. Did pretty well there. I have 1 put on GME at $120 for April 16th that was a yolo, but I was and still 99% sure that GME is going back to sub $50. Disclaimer: This is not a yolo play and represents a small % of my trading account that I don't mind being wrong on while still learning the options game. That said, what do y'all think of my reasoning behind the play?

$SPRT Support.com had news come in that they were going to have a merger with a BTC mining company that has it's own power plant called Greenidge which is not public yet. When they did go public after the merger, $SPRT stock would be converted to Greenidge at essentially 8 $SPRT shares to 1 Greenidge. The merger would not take place at least until quarter three and $SPRT would only get 8% of the total shares. $SPRT share prices shot to almost $10 on Monday after a very stagnant hovering around $2 for almost a year and pulled back closing on Monday at $7.10.

Diving deeper into the math of the merger at what was the current price of $SPRT at the time I looked was $6.47ish Monday afternoon. If Greenidge was only giving .124 of a share for every share of $SPRT, that would imply that Greenidge share price would be somewhere in the neighborhood of of $52. $SPRT total shares float was 19.24 million which would equal about 2.3 million shares of Greenidge after the merger and that 2.3 million shares representing 8% of the total shares would put Greenidge expected total number of shares at 29.82 million. Multiply that by the $52 and you get an estimated market cap of $1.55 billion dollars.

The issue that I found was that Greenidge only mined 1,186 BTC YTD as of Feb. 28th. At that time, BTC was trading at $56,000. Multiply that by the number of coins mined, and you get 67.4 million(far less than this because BTC wasn't trading at 56k for the last year) in revenue before operating costs. That is a looooong way off from deserving a $1.55 billion dollar market cap and makes $SPRT's value nowhere near where it has been trading at. (And yes, I understand that this is a clown market, and the shit could go to Jupiter.)

All that said, I bought 20 put contracts Monday afternoon at a strike of $4 with expiry of April 21st. Like most of these types of plays that run up retarded fast on FOMO, I fully expect to see this trading back at the $2 norm well before April 21st as well as everything I said above. I just don't see either of these companies being worth that much before they even get started.

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