Anant, I don't know who the big boys are. I put anyone who trades a block of 10,000 or more in the "big boy" category. With Lombard, each of the big boy trades (price and volume) can be seen, so its pretty easy to see who is doing what (of course its even easier with a tape).
Lately the trading has followed a very predictable pattern. The vast majority of the big blocks are buys. Occasionally there is some swapping, but not much (most of it was on the high volume days when LGND was bumping up against its previous 52-week high (17). The MMs have beenn dropping the price on very light volume, trying to shake out some weak hands.
Usually, the only ones they get to sell are retail (in the 1000 to 2000 share range)). Today they made it look like big boys started selling. Right after a 6200 share buy at 16 1/2 they dropped the bid to 16 1/4 and the ask to 16 3/8. Then when a 10,000 trade at 16 3/8 was executed, they took the bid down to 16. They picked up some sellers at 16 1/4 and a few more at 16 and then they brought the price back up.
The diabetes deal has been predicted by most, if not all of the brokerage houses that cover LGND. LGND has also discussed the deal at BioCentury and Bear Stearns last month and they'll talk about it again at CalBio, UBS, and Oppenheimer this month. All of the big boys are well aware of the deal and many are waiting until the last minute. The ALRI call is slated for Nov 3, so the value of any stock used for the call will be determined between Oct 6 and the call date. Therefore, I expect much more good news from LGND, including the announcement of the diabetes deal (which I suspect will be then end of this week or sometime next week). Of course they could put out some more clinicals first, but I expect this month to be full of good news, as do the MMs, which is why they are trying to flush out as many sellers as possible at this low price. The longer they wait, the more people they det to start asking if there is a deal and the easier it is to get them to take their profits and run.
It's all really a game that can be seen pretty easily if you look at who is buying (wholesale), who is selling (retail), and what is causing the price dips (the illusion of selling that the MMs are trying to create).
I also expect to hear about a JNJ buyout of AGN, which I think will come before the diabetes announcement. Thus it should be any day now. I think that AGN buying by the big boys will come just before the buyout and and then the big boys will switch very quickly to LGND.
I expect LGND to top $20 (all time high is 19 3/4) on or about the announcement date (within a couple of weeks). |
