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ONYX Pharmaceuticals, Inc. Message Board

  • kot882001 kot882001 Jul 3, 2013 12:08 AM Flag

    Defense strategy

    I don't think that anyone can suspect me being short, but I'm also in believe that there is certain probability (15%-20%) that ONXX will reject all offers as "undervalued" and won't be sold. In this case stock very well can go down. Maybe back to 80's, as traders and "momentum player" will drive it down. On the other hand I don't believe that if buy out happens it will be at price higher than $150-$155. So, here what I did: I bought July 120 puts (so at least I'll get AMGN offer if we go lower than $120) and sold Aug $150 & $155 calls to finance the purchase of puts. We'll see how this trade works out against naked long side position...

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    • If ONXX ends up rejecting all comers to remain independent, then the price will go down somewhat temporarily. The Q2 earnings numbers will come out before then, and the expected earnings boost from Kyprolis will provide a solid base to limit the drop and keep ONXX over $100.

      • 1 Reply to dr.vinmantoo
      • Vin, there is no question that ONXX probably will be able to rise on its own merits to the current or similar level (especially now. Even if all offers will be rejected the possibility of new offer always will be in the air and this will support the price). However, this temporary protection does not cost much and enable to keep the shares without suffering any loss...I rarely use this types of "insurance" but in the current situation and taking into account very lost of such protection decided it is warranted.

 
ONXX
124.700.00(0.00%)Sep 30 4:00 PMEDT

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