Bloomberg News

CoreLogic Call Trading Surged Before Greenhill Disclosure

August 30, 2011

(Updates with closing levels throughout.)

Aug. 30 (Bloomberg) -- CoreLogic Inc.’s bullish options trading jumped to the highest level in more than a year yesterday before the company said it may put itself up for sale.

More than 1,200 calls to buy the stock changed hands yesterday, 10 times the four-week average, compared with no trades for puts to sell. CoreLogic shares surged a record 29 percent today, the most since at least 1988, to $11.35.

The surge in options trading happened before U.S. exchanges shut at 4 p.m. New York time yesterday. Less than two minutes after the close, the Santa Ana, California-based provider of property and credit data said it hired Greenhill & Co. to consider a sale of the company.

“It’s very suspicious,” Ophir Gottlieb, managing director of client services at Livevol Inc., a San Francisco-based provider of options market analytics, said during an interview. “It seems like someone caught wind of the news before the close and just went for it.”

Alyson Austin, a spokeswoman for CoreLogic, declined to comment on the trading. So did Dan Smith, the company’s senior vice president of investor relations, and John Nester, a spokesman for the Securities and Exchange Commission.

Almost all of yesterday’s trading was concentrated in January $10 calls, which changed hands 659 times, and October $10 calls, which traded 555 times. The January contracts rose 425 percent to $2.10 as of 4 p.m. New York time today. The October calls jumped 1,233 percent. September $10 calls, which last traded on Aug. 24, soared 3,100 percent today for the biggest gain among the company’s options.

Four-Minute Period

Trading of the January $10 calls yesterday all occurred in a four-minute period starting at 2:35 p.m. New York time, according to data compiled by Bloomberg. October $10 call volume of 555 was in three trades, the largest of which was a block of 445 contracts also at 2:35 p.m., the data show. About two-thirds of yesterday’s trades were at the ask price, indicating that buyers initiated the transactions.

Yesterday’s trading lifted open interest for the January $10 calls to 1,238 from 638 and the number of existing contracts for October $10 calls to 1,274 from 720.

Highfields Capital Management LP, a Boston-based hedge-fund manager, said today it recently urged CoreLogic to explore a sale and disclose the effort publicly. Highfields is CoreLogic’s biggest shareholder with a 7.7 percent stake, according to Highfields and data compiled by Bloomberg.

31% Plunge

Before today, the shares hadn’t closed above $10 since Aug. 4, a day before they plunged 31 percent to $9.92 after the company reported second-quarter sales that missed analysts’ estimates and Bank of America Corp. cut the stock’s rating to “neutral” from “buy.”

Trian Fund Management LP, the hedge fund run by billionaire Nelson Peltz, said in an Aug. 15 regulatory filing that it owned 1.35 million CoreLogic shares as of June 30. The company wasn’t listed in the same filing for the first quarter. Trian has bought stakes in companies such as Family Dollar Stores Inc. and Dr Pepper Snapple Group Inc. and then pressed for changes in corporate strategy.

CoreLogic was spun off from title insurer First American Financial Corp. in 2010. Competitors include Lender Processing Services Inc., Equifax Inc. and Experian Plc, according to a regulatory filing.

--With assistance from Zachary Mider and Joshua Fineman in New York and Miles Weiss in Washington. Editors: Nick Baker, Chris Nagi

To contact the reporters on this story: Jeff Kearns in New York at jkearns3@bloomberg.net; Joanna Ossinger in New York at jossinger@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net


Silicon Valley State of Mind
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus