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

To: Arthur Radley who wrote (13170)	1/10/1998 10:21:00 AM
From: N	Respond to of 32384

"But at the same time, a block of 10,000 shares is executed at the higher end of the bid-ask spread. The smaller sales may be dragging down the stock, but to Birinyi they are dramtically offset by the 10,000 share accumulation." Duh... Let's all hope Lo and Mckinlay really are right about mean reversion in stock prices! ...plus a permanent shock to the upside. Go Lgnd, go onto a higher mean! Nancy

To: Arthur Radley who wrote (13170)	1/10/1998 10:58:00 AM
From: Henry Niman	Read Replies (1) \| Respond to of 32384

TD, I agree that some interesting info can be obtained by looking at individual trades. Of course not all trades that go off at the bid price have to be sells and institutions can chop up their trades into smaller blocks, but over all trends can be seen fairly easy. Last year LGND ran from 11 1/4 in late Nov to 17 on Jan 7. I was watching the trades and was rather surprised at the lack of large blocks. I can't say that institutions were on the sidelines, but it certainly looked like they were. Similarly, after LGND's H&Q presentation the price headed south, and again there was little activity in the large block area. Volume going up and down was modest. Yesterday's action was quite different. Volume was heavy (just under 1/2 million shares) and large blocks were quite active, especially around midday. The action can be seen easily in intraday charts, or simply by looking at the number of trades (200) relative to volume (almost 500,000). When the average LGND trade is above 1000, that's a good indication of large block activity. When its 2500, then the big boys are definitely active. Yesterday was a pretty bloody day across the board. However, when those big blocks were trading, LGND's price held in the 12 3/8 to 12 5/8 range, with many large blocks going off at both ends of that spread. If this were primarily large block selling, I would have expected a drop in price because there was selling across the board. Instead the price held. As the market continued to head south, much of the large block activity ceased. The bid price fell to $12 and on the way down, most of the trades were small. Then the price bounced back up on a very negative day. I interpreted the action as an indication of institutional interest which I suspect is related to the revised earnings estimates as well as the upcoming LGND H&Q presentation in the Grand Ballrom. I suspect that there is a considerable overhang, due in part (possibly in large part) by Farallon trying to get their money out. They played the ALRIZ/LGND arbitrage play to the hilt, betting that LGND would call ALRI. LGND did and they made out like bandits, but when LGND gave them stock for the ALRI, they had stock to sell. They immediately cashed in half of their position, which is why LGND's short interest dropped from 3.6 million to 1.7 million last month. However, Farallon still has lots of LGNDW, half of which is to cover their remaining shorts and the half of which is their profit. LGND's short position is available on the Ligand Links page: home.att.net