I lifted this AMLN analysis from one of the most insightful posters on another board. Rabid longs are prone to conspiracy theories to explain PPS action, so take it as you will. If you're looking for a good short, wait until AMLN hits a new high in September. AMLN has had swings of $7-10 almost every month, and there is an impending resolution of a "supply problem" that could drive the share price, so wait unti the next new high to short if you are going to:
" On June 23, 2003, we issued and sold $150,000,000 of 2.25% convertible senior notes due June 30, 2008 in a private placement in reliance on an exemption from registration under the Securities Act of 1933, as amended. On July 22, 2003, we issued $25,000,000 of the notes in connection with the exercise in full by the initial purchasers of the notes of their option to purchase additional notes. The initial purchasers of the notes in those offerings resold the notes in offerings in reliance on an exemption from registration under Rule 144A of the Securities Act of 1933, as amended. This prospectus may be used by the selling securityholders to resell their notes and the common stock issuable upon conversion of their notes.
The notes will mature on June 30, 2008, unless earlier converted, redeemed or repurchased. We will pay interest on the notes on June 30 and December 30 of each year. The first interest payment will be made on December 30, 2003.
You may convert the notes into shares of our common stock at any time before their maturity unless we have previously redeemed or repurchased them. The conversion rate is 30.7266 shares per each $1,000 principal amount of notes, subject to adjustment in certain circumstances. This is equivalent to a conversion price of approximately $32.55 per share.
Before June 30, 2006, the notes are not subject to redemption. On or after June 30, 2006, we have the option to redeem all or a portion of the notes that have not been previously converted at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest to the redemption date, if the closing price of our common stock has exceeded 140% of the conversion price then in effect for at least 20 trading days within a period of 30 consecutive trading days ending on the trading day before the date of mailing of the redemption notice. We will make an additional payment on the redeemed notes equal to $112.94 per $1,000 principal amount of the notes, less interest actually paid or accrued and unpaid on the notes.
You have the option, subject to certain conditions, to require us to repurchase any notes held by you in the event of a "change in control," as described in this prospectus, at a price equal to 100% of the principal amount of the notes plus accrued and unpaid interest to the date of repurchase.
The notes are evidenced by global notes deposited with a custodian for and registered in the name of a nominee of The Depository Trust Company, or DTC. Except as described in this prospectus, beneficial interests in the global notes are shown on, and transfers thereof are effected only through, records maintained by DTC and its direct and indirect participants.
We do not intend to apply for listing of the notes on any securities exchange or for inclusion of the notes in any automated quotation system."
================================================================ 140% of $32.55 = $45.57
Starting June 22, 2006, and ending July 20, 2006, Amylin's closing stock price met the condition of closing over $45.57, or 140% of the convertible price of $32.55, for 20 consecutive trading days. This enabled AMLN to call the convertibles since it's past the "subject to redemption" date of June 30, 2006.
In fact, the stock price closed over that mark for more than 30 consecutive trading days.
Since the announcement on July 24th and the "call" on July 25th, the stock closing price peak occurred on July 26th and has fallen ever since.
The conclusion of the "call," the issuance of shares and the outstanding interest is August 24th. We have 9 trading days until then. The timing of this short attack seems consistent with this convertible redemption, not anything fundamental, another test of shareholder conviction.
I am sure the other shorts, those not associated with the redemption, are salivating and helping all they can as this plays out.
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