Thursday, July 10, 2008

Orient Express Hotels Put Activity

Orient Express Hotels is interesting, and I've been watching this for about six months now. Here we have an amazing company, seriously look at the assets at their website. Anyway, late 2007 a bunch of institutions (including DESHAW,SAC) were scooping up >5% positions in this company, and also Indian Hotels bought about 11.5% of the company in a December 2007 filing and Indian Hotels wanted to do a partnership with Orient Express but Orient refused. Anyway, this seekingalpha post I read a while back got it spot on. It was overvalued relative to earnings and book and the current economic crisis is not helping. I read recently they were planning on doing joint ventures with this real estate developer called The Related Group "a premier real estate developer in the United States, initially to develop hotels and residences in South Beach Miami; Cartagena, Colombia; and Panama City, Panama." Anyway, as I'm reading all of this I see thousands of Sep $35 put contracts trade which was way over the open interest and average option volume. The stock was around $38 at that time, and the stock tanked today (a few days later) to an intraday low of $29.89 on 4x average volume. Eventually this stock will be a value play.

OEH stock chart

OEH Options Activity

Source: Yahoo Finance