I posted on this several days ago. With market sentiment improving, this stock should start moving up soon. If it does not, I think this is a reason for concern.
If the buyout is between 25 and 30 billion, given the number of shares outstanding that translates to a buyout between $86 and $103 a share.
The market is not dumb. Why would it not have bid the price to somewhere in that range if there is astrong possibility of a buyout at these levels, as almost everybody on this board seems to think.
You have to ask yourself why Carl Icahn would by at an average of $57 a few months back, then suddenly say, I'll give you $84 a share for this thing. Of course his bid is not serious, he just wants to move this thing and make some money. Of all the people who would like to see a sale, he is at the top of the list, why would he want to bother with buying a big pharmaceutical when he can just pump and dump his % of the company and move on to the next company? He'd probably get kicked off of Ebay for bidding on his own auctions then pulling his bid, but this is the market and we don't know the details of his bid as far as I know.
That's why it's not trading at $84.
Its quite obvious the market doesn't believe Ichan's bid is real, ala Kirk Kerkorian who just backed out of the TSO bid.
Ichan is trying to get top dollar for his investment he just bought in the low 60's. I bet the deal happens at 82-83 or it crashes to the low 50's
I agree completely. If they don't find a buyer the stock holders are gonna get F'd. Once the possibility of ever getting $84 is totally off the table, everyone will move their money out and go on to the next "hot" stock... Icahn will either get his sale or FU(K everyone. I wouldn't be surprised if that's what happens... All these people that wanted a sale better PRAY it actually happens or they're gonna end up like Dan Akroyd in "Trrading Places." I hope they like living in double wide cardboard boxes. Ha ha ha *very evily*
Have been in the market since 1959 and it never seems to amaze me. Just when you think something is obvious the market will do just the opposite. One thing that does impress me about BIIB is that they continue to make collaborations etc etc.
As I said, forget about Carl Icahn. I learned that lesson the hard way 19 years ago. The simple fact of the matter is that BIIB isn't worth much more than the current stock price. They might get a European buyer flush with cash from the depreciated dollar. If so, then you win if you're long. Otherwise? Forget about it. Take a look at Wall Street. They're having a credit crunch. Where is the money going to come from to buy a second rate drug firm for a premium price?
If he bid that and was actually willing to pay it then the CEO supposedly would be obligated to take it because: $84 is more than the current price of ~$70 (if he does, in fact, have to do whatever creates the most shareholder value.) Then the company selling would be a forgone conclusion already, but it's not... If Icahn is ready to pay $84 a share then the stock would be higher than ~$70 just because it would be inevitable that it would eventually hit a minimum of $84 (since that's what Carl Icahn bid). That would seem logical right. However, even if Icahn did bid $23 billion, he must have the option to pull that bid off of the table or BIIB would be a sure thing at $70... If you bought at the current price of $70 and he HAD to follow through on the $23 billion/$84 per share bid then it would be a lock that you made money. However, seeing that the price is still at $70, can mean nothing else but that the buyout is all together uncertain and that Icahn can always back out of that deal (the offer must not be binding!!!)...
Icahn probably only bid that to see if any big pharmas would beat his offer and if they won't beat his bid, he'll just pull his bid too and the company won't be sold at all and the price of the stock will free-fall to ~$50 afterwards...
Any thoughts? I'm far from an expert but I'm trying to be logical. It's just a very, very humble opinion
Anyone sitting around worrying about what Carl Icahn is going to do is a moron and will likely lose money. If you know anything about him, you know that he's in the game to benefit only one person: Carl Icahn. Ask yourself this: if you had 27 billion in your checking account, would you buy BIIB? That's funny, no? Of course you wouldn't.
My thinking is that once the sales books went out for all bidder to see, the reason that the share price is flat at $69 to $71 is that it is possible that all the bidders will not find enough value to pay more than the current market price as well as the complication of this deal Therefore there is some uncertainty. That being said I strongly feel there at least 1 or 2 bidder who will pay $85 to $92.00