fan, It was fine because we're way out of the $5s, and looking at the $10s. I think it highly unlikely that any bid, at any time, without a 2 pps handle, would be acceptable to Ariad. Because I suspect Bax is not the company that will not eventually being buying Ariad (it's just too small IMO), what the Bax bid did was lay in a new floor. I think it unlikely we'll ever dip below $8 going forward, no matter what. Even money we might never go below $9. Bax will continue to be hard pressed to fend off Shire. One could even argue Bax buying Ariad for $20 would be moot to Shire. Shire could then decide to pony up whatever necessary to buy Bax, and then spin off Ariad. Any loss on Ariad, if any, would equal whatever they might have to further pay up now to buy Bax sans Ariad.
IMO, Very large cap BP companies know Ariad is flippable at $2B, so they'd have little problem paying up to $4B+ to get and keep it, and still have enough to invest another $1.5B to build out Pona and '113, and who knows, about '788. I think with that extra post b/o investment, Pona becomes the next Avastin (mostly in combos).
Also remember, there are 40M shorts +/- still out there. As they cover now, they'll be buffering any decline from here. My $20+ target is for Oct '16, and could happen earlier provided substantial '113 and '788 news comes out, i.e. whichever comes first.
Depending on the risk evaluation of the BP buyer, it is plausible a BP could decide to avoid a bidding war next year by using cheap money now and ponying up in the lower $20's, earlier than perhaps late next year, perhaps even next week (though I think that is not too likely, but am hoping SS is correct).
The sooner the better. Ariad could repay the first convertible (their choice) without dilution. The warrants will dilute no matter what, but the long options absolutely limit the damage to the BP buyer, screwing the option seller. An earlier b/o also limits the most recent synthetic to 10% on $50M, so it's $55M (net just $5M because we haven't spent the $50M yet) to buy it out.
Impending rate increases are incentive to act now also.
All good.
I never saw a company sold at 7X its pps before (IDIX), so $20+ for Ariad, 2x from here, is pedestrian.
