Agouron Pharmaceuticals (AGPH) Message Board

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Biotech / Medical : Agouron Pharmaceuticals (AGPH)

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To: per strandberg who wrote (5557)	10/22/1998 3:24:00 PM
From: Biomaven	of 6136

per, what will happen with shorted shares when/if AGPH spins off the oncology company Anybody short AGPH as of the record date for the spin-off would have to deliver the oncology shares as well. They would have to do this by trying to borrow shares to deliver. One problem might be that the oncology division shares might trade below $5 and so be non-marginable, which might make them harder to borrow. At the very least, the spin-off is a hassle for the shorts, and it could conceivably even create a (temporary) squeeze in the oncology shares. Personally, if I were short (which I'm not - I'm long), I would close out my position ahead of the spin-off and re-establish it after things quieted down. If a short was thinking of covering anyhow, it's certainly easier and cheaper to do it ahead of the spin-off than after. Peter

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