Did you know AA market cap is less than Alcan's 33.3bln to 41.58bln.
And AA is the larger company and a member of the DJIA.
Also that the 2009 (1 year from now) 17.50 call option is trading at 20.90.
So to break even AA needs to be 38.40. Today it is at 37.74 so it needs to move 0.66 to break even, a 1.7% move. That means someone is willing to sell you a global industrial powerhouse for just 1.7% for the entire year of 2008 and the volatile 2007 isn't even over yet.
There are two notable risks:
1) NOT LIQUID AT ALL, SO YOU MUST STICK IT OUT
2) Industrial contraction and AA isn't bought out. But this isn't Tribune were talking about but a cash generating machine.
BUY 2009 CALL OPTIONS 17.50 FOR APPRX 20.90=2090 DOLLARS. YOU ONLY PUT UP 55% OF PRICE.
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