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Biotech / Medical : Agouron Pharmaceuticals (AGPH)
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To: Lee Solomon who wrote (3142)12/4/1997 1:34:00 PM
From: Joe E.   of 6136
 
<<Since this position is still open I believe these puts were sold by an
investor or fund expecting the price to rise. Now the question is how
will this position effect the stock price through the Dec option
experation? My guess is that AGPH will stay depressed significantly
below 40 so that these puts can not be rolled forward again and will
expire worthless. I hope I'm wrong because I am long.>>

The existence of the puts will tend to cause the stock to close at 40 at the time of the expiration, all other things being equal. On the other hand:
1. The puts represent only 400,000 shares.
2. Short interest when last reported was at 7 million.
3. So far today, 1.5 million shares have been traded.
4. The stock is at 28.5, well away from 40.
The above four points, in my view, suggest that the effect of the puts will be very small relative to the effects of the other things that move the stock price.

So I would not worry about the puts impacting the stock price, unless the price gets to the high 30's by mid December.
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