ARIAD Pharmaceuticals Message Board

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Biotech / Medical : ARIAD Pharmaceuticals

ARIA 23.99

0.0%

Feb 17 4:00 PM EST

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To: Jongmans who wrote (473)	2/7/1999 5:55:00 PM
From: Biomaven	of 4474

Martin, I agree that based on the 8-K the conversion is at 100%, which does to some extent mitigate the effect of the floorless. The bad news is that there are at least 2 tranches, totalling $10m, with the possibility of further tranches down the road. The second tranche should be announced soon. I agree with John that the investors have the incentive to short the stock to push down the price in the 21 days before they convert. However, they do not have to do this right now - they can wait until a time of their choosing. The agreement (which is ridiculously complicated for a deal of this size) doesn't explicitly prohibit shorting. Doesn't mean that they will do this - indeed I doubt they want to risk the stock ending up on the BB. However, if they ever want to exit their investment (or part of it), they have every incentive to do so by shorting in the 21 days before conversion so as to guarantee they come out at least somewhat ahead. If they convert and then sell, who knows what sort of price they would end up getting for their shares. Peter

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