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

To: Robohogs who wrote (32881)	11/12/2009 10:07:13 AM
From: IRWIN JAMES FRANKEL	1 Recommendation Read Replies (1) \| Respond to of 52153

(OT BNI write) I assume Jon has this right in which case I withdraw my favorable view of the write. :-) ij

To: Robohogs who wrote (32881)	11/12/2009 11:37:21 AM
From: Biomaven	1 Recommendation Read Replies (1) \| Respond to of 52153

I haven't looked at the details here, but I don't think that's how it works generally. In cases where shareholders have to make an election, option holders cannot make the election without exercising. Thus they get stuck with the "non-election" default - they get the same treatment as shareholders that make no election. In this case I believe the cash/stock ratio is fixed, which means the non-electors will get the balance of whatever the folks that make an election don't want. (This happened to me once when I had some LEAPS in a biotech that got bought for either cash or stock with no collar, and everyone else wanted the stock. So my time value went poof. But here BNI has lots of institutional shareholders that don't care about the tax, and so might take cash. In that case the default non-electing option would include some shares, and the options would transfer into Berkshire options. Peter