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Biotech / Medical : Biotech Valuation
CRSP 62.57-2.5%Oct 29 3:59 PM EDT
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To: Robohogs who wrote (32881)11/12/2009 11:37:21 AM
From: Biomaven1 Recommendation  Read Replies (1) of 52153
 
I haven't looked at the details here, but I don't think that's how it works generally.

In cases where shareholders have to make an election, option holders cannot make the election without exercising. Thus they get stuck with the "non-election" default - they get the same treatment as shareholders that make no election.

In this case I believe the cash/stock ratio is fixed, which means the non-electors will get the balance of whatever the folks that make an election don't want. (This happened to me once when I had some LEAPS in a biotech that got bought for either cash or stock with no collar, and everyone else wanted the stock. So my time value went *poof*.

But here BNI has lots of institutional shareholders that don't care about the tax, and so might take cash. In that case the default non-electing option would include some shares, and the options would transfer into Berkshire options.

Peter
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