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Biotech / Medical : Biotech Derivatives -- Ignore unavailable to you. Want to Upgrade?

To: sim1 who wrote (398)	9/16/1999 12:52:00 AM
From: RWReeves	Respond to of 555

Thanks Stuart, I remember some of this primer from my mis-spent schooling, when the discussion was still largely theoretical. <Future acquisition or reabsorption into the parent company is usually the sole anticipation of reward for tracking stocks.> Pretty much says it all. If they don't want to buy it back, they won't. So no competitive bidding that makes our "efficient" market. Hence a stunted upside. As you point out there is also technically a free "no bankruptcy" put included, although I suppose that only means it can't go much below cash value per share. GZMO doesn't always seem to act like it had a floating call and built-in toxic, but I think that's the "synthetic" for the tracking stock. My guess is that it lends itself to shorting since there isn't much chance of a sudden tender offer, and the upward bounce on news usually has a looooong time to translate into real earnings and hence value to the parent. GZMO does drop pretty fast from the heights, don't it? Appreciate the discussion. Hope it's been of help to others but don't mean to monopolize the thread. RWR