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Elan Corporation, plc Message Board

  • ryken_mgs ryken_mgs Mar 24, 2005 2:55 PM Flag

    T reintroduced, ELN opens +12

    I can't wait

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    • I hear ya!

    • Is there news pending at 2:00 pm???

      You are correct if T comes back 12-14 easy start and back to $ 20 share

      • 1 Reply to oldpalos
      • That estimate would seem to be a bit low.

        You see $12 is still lower than the current expected value of the stock according to at least one analyst report we know off.
        Morgan Stanley had the current fair value at $13, assuming a low chance of Tysabri back in full.

        For example Smith Barney said 60/40 that Tysabri returns I believe?

        If we only assume 60% chance of full return and 40% chance of absolutely no return we get an estimate of :

        60% * value with T + 40% * value with no T =
        60% * $23.16 + 40% * $5 = $15.90
        [ value with T based on 200-day average,
        value without T based on Morgan Stanley estimate ]

        The proper way to do it of course is to use a set of scenarios, but this gives the general idea.

        But the moment Tysabri is back the estimates will largely come back to the old estimates, toned down a bit probably (a wait & see attitude).
        But still they are very likely to be at least the 200-day moving average, so about $23.

        Now then, if you and I know that and all the analysts and brokerages now that would I, you or they dare to open so low?
        I for one would simply try to get some at a price between previous (say $13) & then current fair value (say $23), which in that case would be $18.

        Of course in the end the opening price will be determined by a specialist, but the average bids & asks is what drives his choice & I think those will be more in the $18 range.

        But I agree that the next stop would be the low twenties, unless there is an immediate avalance of upgrades.

    • More like the teens



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