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jbog

12/23/10 7:16 AM

#111329 RE: DragonBits #111328

Johnbits,

The underwriters would have been forced to cover (fully or partially) any open naked positions with the original 200K+ shares that they exercised already.

This partial exercise is so unusual that we don't read much about it. Cadence Pharmaceuticals had a partial exercise recently but besides these two I can't think of any others.

From a long position, we can see they left over $500K on the table and that makes no sense.