Wednesday, December 03, 2014 11:51:37 AM
Quite a bit of trading for 3 days from the announcement will be short covering and margin calls - short interest was supposedly 15M shrs as of 11/14 but 27.4M shorted shrs covered yesterday - makes you go "hmmmm", eh? No such thing as naked shorts, LOL? And 8M shrs were newly shorted - nearly 44% of total trade volume of 82M yesterday was short covering/new shorts:
http://www.shortanalytics.com/getshortchart.php?tsymbol=avnr
A lot of folks bought $17 calls too, hoping for a 2nd bidder - volume yesterday was 13.3k contracts, OI now 14.3k - for 10 cents yesterday (5 cents today) a cheap gamble:
http://www.optionistics.com/quotes/option-prices
As per holding vs. selling, Otsuka said tender offer goes out in 10 business days - not sure if a 2nd bidder can enter after that process starts, but doubt it. You'll only get the max $17 if you tender your shares - stock is currently trading at $16.91, and it'll stay between $16.90 - $16.96 or so until the deal is completed next year - every stock I've had bought out sold on the open market for less than the BO price until the stock was delisted - dunno why, but it's happened every time.
Last one I had was FWLT - BO price was originally ~ $34/shr, with $16 cash per share of FWLT and .8998 shares of the British company AMEC, or $32 cash/shr FWLT - I sold all my shares at $33.94 2 months after the deal was announced after no other buyers emerged. But because of international merger rules, deal had to pass scrutiny of US and EU governments. Meanwhile, several quarters flew by, with FWLT and AMEC stock price dropping on lower earnings - AMEC shrs have dropped 23% in value since I sold, anyone who selected $16 cash + shrs of AMEC got screwed. Not saying that will happen with AVNR because it's currently an all cash deal, but watch out if someone else makes a cash + shrs offer.
I also hope that Otsuka doesn't raise the price of Nuedexta to maximize the BO value - I know AVNR has raised the price at least once already - I take N very rarely, but just one scrip is worth 25% of drug costs before hitting the Medicare donut hole - that's huge - and I'm nearly out of the scrip I got 3 yrs ago, will either need a refill in 2015 or consider not taking it anymore, which would suck for those rare times I do need it (temporary CNS issues). Works great, BTW
http://www.shortanalytics.com/getshortchart.php?tsymbol=avnr
A lot of folks bought $17 calls too, hoping for a 2nd bidder - volume yesterday was 13.3k contracts, OI now 14.3k - for 10 cents yesterday (5 cents today) a cheap gamble:
http://www.optionistics.com/quotes/option-prices
As per holding vs. selling, Otsuka said tender offer goes out in 10 business days - not sure if a 2nd bidder can enter after that process starts, but doubt it. You'll only get the max $17 if you tender your shares - stock is currently trading at $16.91, and it'll stay between $16.90 - $16.96 or so until the deal is completed next year - every stock I've had bought out sold on the open market for less than the BO price until the stock was delisted - dunno why, but it's happened every time.
Last one I had was FWLT - BO price was originally ~ $34/shr, with $16 cash per share of FWLT and .8998 shares of the British company AMEC, or $32 cash/shr FWLT - I sold all my shares at $33.94 2 months after the deal was announced after no other buyers emerged. But because of international merger rules, deal had to pass scrutiny of US and EU governments. Meanwhile, several quarters flew by, with FWLT and AMEC stock price dropping on lower earnings - AMEC shrs have dropped 23% in value since I sold, anyone who selected $16 cash + shrs of AMEC got screwed. Not saying that will happen with AVNR because it's currently an all cash deal, but watch out if someone else makes a cash + shrs offer.
I also hope that Otsuka doesn't raise the price of Nuedexta to maximize the BO value - I know AVNR has raised the price at least once already - I take N very rarely, but just one scrip is worth 25% of drug costs before hitting the Medicare donut hole - that's huge - and I'm nearly out of the scrip I got 3 yrs ago, will either need a refill in 2015 or consider not taking it anymore, which would suck for those rare times I do need it (temporary CNS issues). Works great, BTW
The Thought Police: To censor and protect. Craig Bruce
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