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Biotech / Medical : Tularik Inc. (TLRK) -- Ignore unavailable to you. Want to Upgrade?

To: scaram(o)uche who wrote (239)	6/19/2002 1:54:51 PM
From: Czechsinthemail	Read Replies (1) \| Respond to of 598

Good questions. I know that fund management companies have their own portfolios and who knows what kind of trading they may do in advance of fund purchases and sales? It is conceivable that they sell from their own account before selling from their funds. Ditto for buying. There is also considerable discussion of mini-hedge funds recently. Since hedge fund managers are typically compensated largely on a percentage of money earned, they may be much more richly compensated for being "right" than others are penalized for being "wrong" in their portfolios. Beyond that, small companies are easier to price rig than large ones, and it's a good bet that those setting stocks up to be trashed are going to be buying them when they are down and out. Here is the yesterday's trading record for TLRK: host.businessweek.com There were a number of block trades, but I didn't notice a clear pattern of predominant buying or selling among them. Maybe others can decode the signs. My approach, thick-headed and contrary though it may be, is to try to find the most promising companies and buy them when their stock is down. Though it is generally not much fun to watch your stocks get hammered, I've learned that systematic buying when they are down sets up the best profit opportunities for when they come back up. It's easier and generally more workable than trying to figure out an inside game I haven't been invited to watch let alone play. In that regard, I am very grateful for the generous contributions of time, energy and insight you and many others provide that helps make it easier for all of us to understand the companies and how their businesses are likely to do. Many simply don't take the time to learn about the companies, but it is nice to have the rich resources available for those wanting to learn.

To: scaram(o)uche who wrote (239)	6/21/2002 12:48:03 PM
From: Czechsinthemail	Read Replies (1) \| Respond to of 598

>>My question...... what does the fund manager gain, all fronts and every conceivable angle, from letting it be known that he/she is going to sell and is willing to sell at much lower prices? How do the buyer and seller profit in the interim, between the advertisement of shares available and the consummation of the trade?<< Looking at the open interest in TLRK's June contracts going into expiration, there is very high open interest in the June 12.50 calls (313 contracts) and the June 10 puts (430 contracts). This is much higher than the open interest for other months and other strikes. Normally you would expect the bulk of the option contracts to expire worthless. However, in this case it looks like the money is being made by selling the June 12.50 calls and buying the June 10 puts. My question is whether these positions might have been coordinated so that those selling the calls were simultaneously buying the puts -- effectively creating a stronger bet that would be show maximum profitability so long as the stock closed below $10 at expiration. That would seem to be an alternative to or perhaps a supplement to profiting from an outright short position in the stock. I'm curious about the possibility that someone could be hedging (or frontrunning?) their share liquidations via counterbalancing shorts or option transactions. Even more sinister would be to do it and then buy back the shares before the end of the quarter so there would be little or no net liquidation but a trading profit realized along the way. Meanwhile, TLRK and several other small biotechs seem to be swimming upstream today. I've heard many small cap fund managers mentioning small biotechs as value plays, so perhaps in the midst of a generally negative market climate they are putting some money into the sector.