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

To: Henry Niman who wrote (21586)	6/1/1998 3:05:00 PM
From: jayhawk969	Respond to of 32384

My take on the SRGN purchase as an arbitrage looks like this: Srgn Share Cost+comm ------00.51 00.53 00.55 00.56 Lgnd equivalent Cost ------14.26 14.82 15.39 15.67 $0.23 per Srgn share ----- -6.43 -6.43 -6.43 -6.43 Residual Ligand cost ----- 07.83 08.39 08.95 09.24 Premium over current ----- $0.51 $1.07 $1.64 $1.93 13 3/4 The above does not take into account $ time value of the 9 month to 24 month delay on FDA approval for ONTAK. Current SRGN bid is $.52 and current ask is $.54 My commissions at Schwab run a little less than $.02. The way I currently evaluate this opportunity is the price of the premium is the wager to receive the $6.43 Xtra dividend upon approval of ONTAK. I am a little surprised that there has not been more trading of SRGN. The premium has increased by $.02, however the probability of payoff is high.