Is this possible?
Assume for a minute:
I'm a CEO at "Company" XYZ, MKT CAP $1 BB. So far, my input to the board of directors and the company directly has helped improve the company greatly.
I reckon that, going forward, my ideas/direction can turn the company into a firm worth 2 Billion Dollars (i.e. double it's value).
However, I want to profit substantially off of this, if I am able to double the firms profits.
Here's my current plan on how I might profit:
1, First, I would purchase long-term call options (from "Company XYZ"). These would be considered exotic options. I would purchase (with the help of a "Lender ABC") 25 million dollars worth of these options from Company XYZ.
Then comes the hard part- I double the companies value through my ideas and direction.
Then, once the stock options are worth exponentially more, I sell them back to the company, or an outside source, after paying back lender ABC, say $50MM.
My questions to you all:
1. Would it be feasible to obtain a lender to help me buy the $25 million worth of exotic call options in such a scenario?
2. Assuming the company's board of director's believed I could double the company's value, would company XYZ likely sell $25 million worth of exotic options to me? Would they be able to sell exotic options to an employee?
3. Has anything like this every been done? Has a key employee of a corporation ever had so much faith in their ability to turn a company around, that they PURCHASED stock options from their employer? Can it be done?
Exercitationem quis recusandae modi dolorem eius quia. Aperiam praesentium soluta repellat quis facilis sit. Quidem quasi aspernatur incidunt id itaque.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...