Nielsen (NLSN): Heightened Options Activity Could Signal An Elliott Move

There are a couple of points to note as far as information services group Nielsen Holdings are concerned currently. The first is a spike in August Call Options activity, and the second the recent mainstream media comments, the FT, WSJ and others, that Activitist Investor Elliott Partners is likely to be looking to go for the full blown private equity strategy, rather than its current approach which usually amounts to being either enemy within or a backseat driver.

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While both the MSM comments and options activity are not always the most reliable of signals, the fact that they have combined currently is helpful. Also helpful is the third rebound for the stock since December in the $22 zone, the latest a narrow bear trap. Very often we see temporary new lows for a stock before M&A action – something specifically designed to ensure that no accidental longs get a windfall.

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While the proof of the Elliott move theory (it currently holds around 13%) might be a break of the 50 day moving average at $23, there seems to be little downside to this situation, as we know from last August that it was pushing Nielsen to put itself up for sale.

 

Author: Zak Mir

Financial commentator, interviewer, technical analyst

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