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Biotech / Medical : Ligand (LGND) Breakout! -- Ignore unavailable to you. Want to Upgrade?

To: bob zagorin who wrote (29886)	1/5/2000 1:13:00 PM
From: Torben Noerup Nielsen	Read Replies (2) \| Respond to of 32384

Something strange is going on. The warrants are now priced so close to the price of the underlying minus the exercise price. That is, there's virtually no premium any longer. I'm trying to come up with an explanation for that and I can't come up with anything decent. One possible answer is that someone expects Ligand to be acquired intact in which case, the warrants would presumably be converted at acquisition. Right now, Elan owns 17% of Ligand on a fully diluted basis. If I remember correctly, part of the financing agreement between Ligand and Elan was that Elan could not take more than a 25% stake in the company without tendering an offer for the whole company. I wonder if Elan has been acquiring more shares on the open market. They have the resources to do an outright acquisition if they choose to. I'm not even sure it's a bad thing if the price is right. They'd presumably offer some sort of premium to the present price. Any thoughts? They must have considered it seriously since the clause was in the financing agreement. Thanks, Torben