Archive for November, 2011
Pharmasset buyout bid may be options bonanza for some
Some lucky options players appeared to have placed well-timed bullish bets in biotechnology company Pharmasset Inc’s calls before Gilead Sciences unveiled an $11 billion takeover bid on Monday. Gilead Sciences Inc , the world’s largest maker of HIV drugs, will pay $137 per share for each Pharmasset share, a generous 89 percent premium to Pharmasset’s Friday closing price of $72.67.
The surge in Pharmasset shares of nearly 85 percent to $134.17 in afternoon trade, created an opportunity for some options traders to reap a tidy windfall by taking profits off the table on call positions initiated this month. “As most investors probably don’t anticipate a higher bid to come in, some are using the surge in the share price to book massive profits,” said William Lefkowitz, options strategist at brokerage vFinance Investments in New York.
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