At precisely 14:04:08 a flashing red Bloomberg headline hit that "DELL IS
SAID TO BE IN TALKS TO GO PRIVATE." Moments later the stock slammed higher by
10% triggering a circuit breaker. Whether or not there is an actual deal behind
this is unknown: considering the "two sources" used by Bloomberg gave virtually
no details on who the buyers are, or what the vision for the pro forma private
company will be, we are inclined to assume this is nothing but a big, and
successful, fishing expedition by a party that sought to make a quick buck.
Either way, it will be made known if there is a deal here within a few days,
because unless some PE firm steps up they will be unable to say the 20% premium
is based on a pre-announcement price, and will end up having to overpay by
another 20%. What we do know, is something completely unrelated. Courtesy of
Nanex, who have broken down the trades from the pre-headline prices of $10.90 to
the halt price of just under $12.00, it appears that today's robotic algo brains
take no more and no less than 4 seconds to fully process flashing red
headlines. This is how long it took to send the stock in a straight
line from the bottom of the range to the top, because all along the ride there
were offers, until finally the offer stack was exhausted at the circuit breaker
price. To anyone who blinked and missed the move: condolences - just get a
collocated algo and any future LBO announcements - real or fake - will be far
more lucrative courtesy of an electronic trigger finger located right on the
exchange.
Source: Nanex
Source: Nanex
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