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Biotech / Medical : Agouron Pharmaceuticals (AGPH)
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To: Lee Warzala who wrote (472)3/16/1997 1:01:00 AM
From: James Silverman   of 6136
 
Lee,
Here's my take on the stock gyrations.
The stock has had $10 point days (high - low) with no news.
Rumors have been rampant and have been noted here with frequency.
There is over 1M shares short the stock last I heard, a huge amount, essentially 10% of the shares outstanding.
AGPH is very illiquid, with a thin float, which leads to the wide spread between bid and ask, as well as the sharp day to day and intraday volatility.
So the trading halt created a huge amount of anxiety for holders of common, option players (Puts and Calls) and naturally the shorts.
So with the positive announcement you had shorts running to cover in a panic, as well as people buying on the news with market orders.
The stock shoots up above peoples expectations and hence people sell on the news, probably many shorted the stock at the open or soon thereafter, driving the stock back down.
This is all exaggerated by the illiquid nature of the stock. It also was probably influenced by the basically 2 hour plus trading day and the fact that the weekend was here-people wanted to be out of their positions-short term traders and shorts.

What happened was to be expected. There's no big scam going on.
AGPH is very volatile as we all know and it is to be expected. I don't see that changing any time soon.

I own shares in AGPH and have no intention of selling any time soon.
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