Vipshop Holdings (VIPS), JD.Com Inc (JD) Merger?

There’s been plenty of speculation this week of a merger / acquisition involving Vipshop Holdings (VIPS), and JD.com (JD).  While speculation is all well and good, it’s especially good for the share prices of both VIPS, and JD.  While we certainly don’t have the inside scoop on whether these merger rumors are real, one thing that is real is the massive amount of call buying in both stocks lately.  And the price action is certainly interesting the past few days.   Bloomberg reports that officials at both companies deny any merger talks have happened.   So what’s been happening in the call options of VIPSHOP (VIPS) and JD.com (JD)….

The smart money has been hitting the call options of JD.com (JD) for the past week or two.  And they’ve been hitting them hard and often, even as the price has been rising consistently.  Tuesday July 18 saw a ton of call option buying in JD.com.  They started scooping up various call option strikes early, and often:

400 JD.com (JD) Dec 39.0 Calls $5.50

473 JD Aug 40.0 Calls

Jul 42.5 JD CALLS $18k BET

514 JD Jul 42.5 Calls bought at ask of $0.35

415 JD Jul 28th 41.5 Calls Bought at $1.34

301 JD Jul 28th 43.0 Calls bought at $0.79

Jul 42.0 CALLS $162k BET

438 JD Aug 43.0 Calls $1.83

And the list goes on…… As you can see, this “smart money” was hitting up the JD call options, and were sneaking into all the various strike prices.  This would appear to be fueled by the merger chatter between JD.com (JD) and Vipshop Holdings (VIPS).  However, the smart money has also been hitting up all the other Chinese dot com options, such as BABA, BIDU, etc etc.

On the other side of things, VIPSHOPS (VIPS) also did see a lot of unusual options activity yesterday:

Starting with a call buy of the Jul 11.5 VIPS CALLS for a nice little $24,000 wager, things started heating up for VIPS.  This was followed by a purchase of Jul 11.5 VIPS CALLS totalling $16,000, and then several more blocks of VIPS 11.5 Calls were purchased.  Then they started hitting the higher strikes, such as a buy of 894 VIPS Jul 12.0 Calls at a price of $0.15.  Keep in mind these calls expire THIS Friday.  But the interesting options buying didn’t end there for VIPS.  There were also several large buys in the Nov $15 VIPS calls, and even a size buy in the Jan19 $7 calls.

So what does all this call buying in JD.com (JD) and VIPSHOP (VIPS) mean?  We have no idea. Nor do most/any of the analysts that cover these two Chinese stocks.  But this options action, along with the merger rumors, are fueling nice premarket moves in both stocks, so far this morning.  JD.com is is up 45 cents in premarket trading, or just over 1%, to $43.54, adding to yesterday’s gain of 3.27%, or $1.36.   VIPShop Holdings (VIPS) is also ripping nicely this morning up 31 cents or 2.7% in premarket, following a 4% rise yesterday.  It’s currently at $11.80.  VIPS was trading over $12 earlier in premarket action.

We’ll keep you posted on how things progress with the JD.com (JD) and Vipshop Holdings (VIPS) merger rumors as/if they happen.

JD.com JD stock chart options frenzy amid merger rumors