Ligand - LGND - thread for non-PhDs Message Board

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Biotech / Medical : Ligand - LGND - thread for non-PhDs

LGND 206.54

+3.2%

Jan 9 9:30 AM EST

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To: John Grandy who wrote (16)	1/20/1997 9:21:00 PM
From: Henry Niman	of 57

John, Although I don't do short trading, I did assume (but didn't indicate in the recent post) that there was an interest charge associated with the short. I believe that the positions were largely taken sometime in 1995. Back then the premium was much higher. I know that about a year ago LGND was around 12 while ALRIZ was around 18, so LGND could be shorted, 75% of the funds used to buy enough ALRIZ to cover, and the 25% could be used to pay the interest on the short position. Then when ALRI is called (for $22?), $14.25 would be used to exercise the warrants and another $7.75 per share would be pocketed. Of course if ALRI is not called (highly unlikely) and/or those shares have little or no value, then the position would lose money, although not until ALRI was definitely worth less than exercise price of 2 warrants which probably wouldn't be certain until June, 2000 - and I really think the liklihood of that happening as being very close to 0). Henry

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