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Rigel Pharmaceuticals, Inc. Message Board

  • Gengnome,

    I have a classic case of paralysis by analysis. I am strongly tempted to buy more RIGL at these levels, but the timing of the IND vis a vis the lock-up expiration has my little walnut brain tying knots around itself.

    Last time I shook the 8-ball, it speculated that the IND would be July-August-ish. This is pure speculation. The 8-ball does NOT have any inside information; it just tends to speculate and guess better than you or me.

    So, if big holders of RIGL subject to lock-up have any brains, you would think they would wait until IND, regardless of lock-up expir.
    And long term guys like Deleage (sp?) won't be selling big chunks at lock-up expir., imho.

    But look at the recent volume, my friend. You probably know it without looking. If just a few of RIGL's big holders sell just a little percentage of their shares, we could be hosed.

    If you can trust Yahoo's numbers, 31.9 million shares are locked-up, and I will make the assumption that 90% of those unlock on May 28. (Any thoughts on that assumption? Maybe it's 100%)

    So we're talking 28.7 million new shares tradable. What if only 1% of those are sold? That's 287,000 shares, or 41 times today's volume or about 6 times average daily volume.

    To think that (even with a solid IND in the offing) any less than one percent would be sold at lock-up expir. is too optimistic, imho.

    It's somewhat like the OPEC problem--everyone would like to sell some of their holdings, but if one instutional holder or corporate insider sells too much, the whole thing could come cascading down.

    Accordingly, we need the current restricted stockholders to have epic-sized cajones and heroic proportions of intestinal fortitude to refrain from selling anything significant at lock-up expiration. Insitutional holders occasionally dump for reasons having almost zero to do with the fundamentals of the company (e.g., market cap restrictions or fund promote specifications).

    So, I am fearfully (but in some ways, hopefully) thinking that we will have a huge buying opportunity after May 28th. If holders are going to bail out at under three, I am optimtic enough long term to bet the barn.

    Good luck to everyone!

    Dr. Hype

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    • Hello drHype23 and others:

      I think that much of what you say is true, and your logic is impeccable. Nonetheless, remember that markets are discounting mechanisms, and one suspicions that the low price we are seeing factors at least some dumping.

      If that is the case, the market might actually respond positively to some selling off--the huge hangover will be diminished.

      Just a thought.

      Good luck,

      Howard

    • Gengnome/drhype23 here's a story about how recent lock-ups really had no affect on the stock price. In fact in some cases the price went up. Here's the link to msnbc
      http://www.msnbc.com/news/559800.asp
      Hopefully this will hold true for RIGL !!

      • 1 Reply to Trade_Winz
      • Thanks for link--I read the article. It sure would be nice if RIGL goes up instead of down at lock-up expir.

        But big difference betw. RIGL and those stocks discussed in the article is the number (and percentage) of shares of the float that are short.

        According to Yahoo, only 1,000 RIGL shares are short, which does not indicate an over-shorted situation to me.

        Does anyone have any better information on how many RIGL shares are short?

        Dr. Hype

 
RIGL
2.14+0.04(+1.90%)Jan 23 4:00 PMEST

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