Merrimack Pharmaceuticals, Inc. (MACK)

[esad1]

This is interesting...they say we sold the company..we sold an asset that has potential but we did not sell the science. Now the convert owners are short the stock. About 7.5 Million shares.If they win the suit..which could last a while they still have to eat the dividend whatever it is. Secondly, the math still does not make sense to me. MACK gets $575 million. They pay off $195 Million in debt which leaves $380 Million. They pay a $200 Million dividend. That leaves $180 Million. They say they want to invest $125 Million in the company. Where is the other $55 Million? When someone figures it out let me know.

If the plaintiffs succeed they get paid par..the bonds are worth 88 now and they cover their short and make whatever. If they lose they eat the dividend and have a $6.25 conversion price.

My thinking is the judge tells MACK to put $47 million plus interest into escrow and the suit will go forward. MACK is NOT going to pay it off as I agree they did not sell the majority of the company. They have $33 Million due from Shire which they said they expect in 2017. They have the come line bet of the $450 Million from Ipsen. We have Peters. Worst case is they pay $1.00 a share in May and we go forward. Best case is the converts case gets tossed and they have to scramble to cover. Watch the options to see if they hadge their bets.