INVN pricing ?4

INVN shares have remained stubbornly below the $12.75-12.90 levels achieved before the proxy scare.  The Hart-Scott-Rodino period is expiring and some may have been looking for that to trigger some change.  However, I had a look at the related options, where the open interest indicates to me that current pricing will probably persist for about another month, leading up to the March monthly expiration:

INVN Options Open Interest
June Calls
March Calls
Feb Calls
Strike
Price
Feb Puts
March Puts
June Puts

58

6.00
20

25
5
247

7.00


58
174
1,216

8.00


309
159
1,286 1
9.00
405 210
97
744
10.00 40
28 3,153
322
903 41
11.00 10
169 75



11.50
80


263
1,470 73
12.00 169
2,303 6,158


76
12.50



3,127
851 684
13.00
123 27
56
306
14.00
0

In most cases there is no open interest on the weeklies expiring in between the monthly expirations, and where there is it is negligible.  Note that the open interest even on the March and June monthlies is NOT huge.  Nonetheless, the inference that I make is that mid-March is when the deal spread (which currently represents about 16% annualized profit) will begin to narrow.  Outlooks like this are always subject to change, but the latest evidence supporting my expectation that the deal will go ahead as planned is the JV launched by Qualcomm and TDK.  16% is far from the best return on capital I've ever seen, but for those who are worried about the broader market and have thus been accumulating cash, it may represent an acceptable middle ground with regard to risk.