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

To: Doug Baer who wrote (12880)	12/30/1997 9:04:00 PM
From: Henry Niman	Respond to of 32384

db, I think that the dramatic drop in LGND's short interest verifies what I posted a couple of years ago (and has been spelled out several times in Farallon's SEC filings). It is almost exclusively an arbitrage position held by Farallon. They had about 3.5 million LGNDW to cover their 3.5 million share short position. When the received about 1.75 million LGND shares as part of the ALRI buyback, they immediately used those shares to cover 1/2 of their short postion. They can cover the rest by exercising 1/2 of their LGNDW (but they have to pay the exercise price), but really have no major incentive to do so since the LGNDW can be converted at any time between now and June 3, 2000. Of course if they want cash, they can using the cash from ALRI to exercise the LGNDW and then SELL LGND, which of course could put downward pressure on the price. LGND IR has says there has been some excising of LGNDW, but not huge numbers. Thus the LGND given to ALRI shareholders has been given to a third party that gave Farallon the credit for the shorted LGND. Others should be able to comment on how such shares would or could affect LGND's market price (this is really out of my area).