Scorpio Tankers president Robert Bugbee is back to making bets on the strength of his company’s stock, and he is doing so in a big way.
The executive has laid out $7m in call options for 555,600 common shares, or 5,556 call option contracts, that will have a strike price of $60 and an expiration in September, according to a press release from the product tanker giant after the close of trading on Thursday.
Thus Bugbee is essentially betting that the New York-listed shipowner’s shares will remain above that level by September.
Scorpio’s stock closed at $70.38 on Thursday after gaining $4.12 or 6.2%.
Bugbee has been a frequent buyer of Scorpio call options in recent years, but this appears to be his first foray into that market since he spent $4.4m on 400,000 shares with a strike price of $40 in January 2023.
More recently, he has made headlines for different reasons.
As TradeWinds reported on 19 January, Bugbee sold $45.4m worth of Scorpio shares in the course of one week after a strong run in trading price.
Chief executive Emanuele Lauro cashed in $27m worth of his holding around the same time.
“I’ve sold all the shares that I want to sell. I still maintain a significant majority of the shares I owned prior to selling,” Bugbee told TradeWinds at the time.
“I’m long-term confident in the success of the company and we’re watching the spot market continue to improve even post my sales.
“However, it’s been a long road with [Scorpio]. I was happy to put dollars on the table in the toughest times and the stock has gone up sixfold since the fourth quarter of 2021.”
Bugbee spoke of making a personal decision within the context of a business known for its volatility.
“In an industry that has proven to have both upside and downside event risks that are most often surprises, for personal reasons, it was the right thing to do to secure some of the gains that I’ve made,” he said.
Helped by a sustained surge in clean product rates, Scorpio management has orchestrated a transformation of its balance sheet over the past two years.
It has slashed debt, primarily through exercising purchase options on sale-and-leaseback contracts covering most of its fleet of 111 operated tankers. At the same time,8 it has bought back shares that trade below estimates of its net asset value.
Scorpio shares have traded as high as $72.89 and as low as $40.34 over the past year.
They climbed a further 1.6% to $71.50 in after-hours trading on Thursday.
