BlackBerry deal disappoints pro traders
In the wake of the deal, in which BlackBerry will go private, it seems some professional traders are less than enthused. After all, BlackBerry's stock only ended the session 1 percent higher.
"I was unhappy with the response the stock got out of the news," said Steve Grasso, director of institutional sales at Stuart Frankel. "I think it should have held at least above $9, but you obviously see that there was no loan security and that was apparent in the stock price."
Grasso thinks traders might still chase the stock, though, so he plans to continue to hold on to his shares. Should the stock break below Monday's low of $8.19 a share, however, he plans to exit the trade.
Using Monday's low as one's stop is the "disciplined" way to trade BlackBerry's stock, said J.C. Parets, founder and president of Eagle Bay Capital. He would avoid BlackBerry's stock all together, though, because he thinks it's too volatile and just not worth the risk involved.
Metropolitan Capital's Karen Finerman didn't say whether she'd trade the stock, but slammed the deal altogether.
"This is absolutely a C-quality or worse deal. It is a letter of intent. It's not a merger agreement. There's no financing in place. That's terrible. They haven't done due diligence yet and the company seems to be falling apart," said Finerman, adding she thinks the deal was a last ditch attempt by BlackBerry to tell Wall Street that it's still trying to save the company.
Last week, the troubled smartphone maker's shares plunged nearly 17 percent after the company announced preliminary second-quarter results that disappointed estimates and cut approximately 40 percent of its workforce. Meanwhile, at least five brokerages slashed their price targets on the company's stock.