I apologize for the inaccurate information. Amgen got better deal for reimberessment from Medicare for Epogen that would help 1998 sales. I imagine that could help ALKS but I am not sure if it directly caused the turnaround in the price.
<<does anyone know if this latest announcement is good or bad in the long term? Stock price is down two bucks in opening.>>
You mean the $100 million convertable preferred offering?
Usually these convertibles are a bearish sign. I have seen many stocks decline after such offerings. For example FUSE took a beating after such an offering. We do not know all the details of the offering till it is done. As someone explained on the Fuse message board, the institutional buyers end up shorting the stock after they buy the convertible securities. It may not be the case here depending on the conversion price etc.
I would like to hear from knowledgeable others, what is a possible scenerio, after the actual deal is announced.
<<The Preferred Stock will be convertible into shares of Common Stock of the Company at a conversion price of approximately $29.625 per share >>
I heard the issuence of convertible preferred like these by small cap growth biotechs end up depressing the stock by institutional shorts. But I never understood why and how that happens. Could someone explain the logic behind it? I would think the convertible holder would like to see the stock to go up above the convertion price. But in reality the stock is driven down by these offerings. Thanks in advance.