Hi Jim,
>Is Third Point any good?
Interesting is probably more like it. They have a history over the last 2 years of finding biotechs that are either mortally wounded or moribund... NABI, PDLI, and LGND come to mind. Daniel Loeb is chief of Third Point, and he has been creative in finding ways to unlock shareholder value... and then leaving the companies corpse still listed on an exchange.
His letters to executive management are creative in their invective. They are often close to the mark. His normal timeframe to remove a CEO once he starts the attack is about 4.5 months. LGND(E)'s CEO, Mr. Robinson, was especially tough and took about 9 months.
It is hard to see how Loeb and 3rd point made more than about 50% on LGND... Although they did some debt swaps on the side and probably enjoyed some tax advantages that normal shareholders can't access. My suspicion is that they liberated the $800M of corporate losses for their benefit. But that requires reading between the lines of PRs and 10Q's.
Shareholders have not done so well, although that depends on when the buy-ins occurred. For relatively long term holders of LGND and NABI, the profit might have been about 25% for L and 0% for NABI. For those who bought at the Loeb announcement, it might have been about 50% for L and 50% for NABI.
I can't figure out what they are really planning on doing with PDLI. There are LGND style problems there and arguably the current CEO is a contender for the David Promison CEO of the Year Award. :-) But I don't know how an asset sale, special dividend, and going out of business sale are going to gain more value than current share price. However I am holding onto my small PDLI position. It is ahead of where it was when he got started.
I haven't followed FLML for a couple of years, but I think it will be interesting. Just skimming a couple of CC notes from past quarters today, it looks like this fits into his pattern. I could tag along for Mr. Loeb's wild ride on this one also.
Last data point. In 10 years, Third Point has gone from $6M to about $6B in assets. They must be doing something right. They held LGND For about 20 months and NABI for about 10 months... Might be a good gauge of their relative patience.
Do check out the PDLI board for Tuck's message containing the latest broadside to the BOD on why they need to fire McDade.
Best,
graham
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