Ligand (LGND) Breakout! Message Board

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Biotech / Medical : Ligand (LGND) Breakout!

LGND 206.36

+1.4%

Nov 26 3:59 PM EST

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To: celeryroot.com who wrote (12282)	12/8/1997 5:35:00 PM
From: Henry Niman	Read Replies (1) of 32384

Celeryroot, Based on Friday's filing, I think that all of Farallon's holdings are now LGNDW. I don't think they were shorting against the box (isn't that shorting shares you own?). They were shorting to set up an arbitrage postion. They bought ALRI when it was selling for 1 1/2 X times instead of 2 X LGND. The arbitrage position guaranteed them a huge profit as long as ALRI was called. There was no reason to buy ANY LGND. They SHORTED LGND and used the LGNDW within ALRIZ to cover. Thus the position is entirelt INDEPENDENT of market prices. They threw in a little extra sghorting to know LGND's price so they would get more LGND for the ALRI they held. The 3.4 million LGNDW is consistant with the amount of LGND they received (and immediately gave to a third party to cover 1/2 of their short postion) for ALRI (they would get about 1.6 million of LGND and they still has 2X that amount as LGND). Why would they have ANY LGND??? Why would today's action POSSIBLY have ANYTHING to do with a covered short position? Someone has a very basic misunderstanding of an arbitrage position. If its me, please set me straight. If it's you, read the earlier posts or go to the library. I've put up my interpretation of the arbitrage position many times over the past two years. Friday's filing and Farallon's position Friday afternoon are all consistant with this interpretation. Have you silently disagreed with this analysis for the past few years and just never posted your version of the positions, or have my posts not been clear?

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