PROLOR Biotech, Inc. (PBTH)

[someconcerns]

Article on Seeking Alpha: http://seekingalpha.com/article/1391461-a-sweeter-deal-on-the-horizon-for-prolor-biotech?source=email_rt_article_title

".... As of 4/26/13, Prolor shares trade at $6.30, an 11.1% upside to $7.00 and a 12.5% premium to what shares traded at in the beginning of the week. The deal currently offers a total premium of about 25% on $5.60. Despite a 25% total gain and a current gain of about 11%, this current premium is not as delightful as the possible future profits Prolor could have in store for it. Some analysts have projected a share price of about $10 to $15 for Prolor. Deerpath Capital indicated that the Company is worth more than $10.00 per share. The overall point here is that the company has been deemed undervalued compared to the current buyout price. So there are a few things investors can do now to take advantage of the situation. Currently, there's about an 11% upside as I am writing this, and so an arbitrage play is defiantly a possibility; but 11% may not be all you get. Considering the current shareholder backlash and analyst valuation of the company, there could be further gains (assuming Opko raises its offer). If Prolor is offered $10 per share; (about 58.73% upside from $6.30) valuing the company at about $634 million and if at $15 per share (138% upside from $6.30), the company would be valued at about $951 million.

Worst Case Scenario For Now

Even if the deal didn't go through at $7.00 per share, and if an investor were to purchase shares now at $6.30, the probable scenario would be that the shares fall back to their $5.50 levels. This drop would propose a 12.7% downside from $6.30. This is not the end of the world either, because even if this acquisition doesn't work out, Prolor still has the possibility of being a profitable and very successful company in the future.

Conclusion

Although I can't tell the future, at the current valuation and possibilities, I believe it's safe to say that Prolor offers a nice arbitrage play with a speculative bonus. Based on the possible upside and limited downside as addressed above, I personally feel comfortable increasing my shares. In fact, I have already increased my position as of 4/26/13, and have the intention of increasing it further.

Please feel free to express your opinions below as I greatly appreciate opinions and criticism. I understand everyone is different in their views towards particular subjects of interests and whether or not you agree with my views, I still appreciate your feedback. I only hope my article provided some insight and help in your investing analysis. Please also keep in mind I address my opinions and views in this article and encourage readers to forge their own opinions when considering trades and investments."