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Biotech / Medical : Ligand (LGND) Breakout!
LGND 203.62-1.6%3:59 PM EST
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To: Machaon who wrote (14184)2/4/1998 12:28:00 AM
From: Henry Niman  Read Replies (1) of 32384
 
Bob, The press release of the offering is at home.att.net (ALRT Offering)

It indicates that the exercise price will be 120% of the average closing price just before the offering was made. I think that LGND's average price was very close to $6, so the exercise price is very close to 7 1/8. I suspect that one of the SEC filings around the offering date (June 3, 1995) would give the exact exercise price. The warrants can be exercised anytime between now and June 3, 2000. LGND has indicated that they will be getting some income from exercised warrants, so I think that the plan that I described for Farallon (exercise 1.7 LGNDW right after they sell their other 1.7 million LGNDW) is well known.
There is an entire page at home.att.net and the arbitrage position has been discussed many times previously (as well as the associated short position which was cut in half when LGND gave Farallon 1.7 million LGND for 1.7 million ALRI). However, some poster seem to still look at the short position in the traditional sense (Farallon will have to buy LGND to cover), although nothing could be further from the truth (the LGND required to cover will come from LGNDW which came from the ALRIZ units and there is no need to buy any LGND to cover the short position of Farallon, 1.7 million shares).
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