Shares in Elan dropping, any ideas.

jonnyj

Hi all,

Im trying to learn about buying and selling shares over the last few months. I've picked out a few companies to watch and one is Elan.

2 weeks ago there was good news that J&J were taking 18% of Elan and investing heavily in some of its drugs. It wiped 1 billion of its depth in one swoop. I thought this would increase the share price as this new investment made the future of the company look very positive.

Can anybody then tell me why, since this good news came out that the price has been dropping. I know that globally shares are on the downward slope is this the reason or is there another?

Any opinions would be much appreciated, thanks.

woodseb

would need to look into it more but i think the terms of the agreement with J&J included a 5 year lockup which effectively prevents any takeover in the near future - there was a lot of takeover speculation in ELN before the deal so i reckon that is a reason why the stock has come off since, despite the deal being positive for the company on a operational basis

daveirl

This post has been deleted.

jonnyj

Thats interesting. thanks lads.

padocon

Just thinking the same. Elan have gone down bit. The big question is whether to take the 5.25 or hold tough and wait for another drop. Start of this month they were 4.80 then to 5.80 thing is will they go to 6.25 if one buys now (to double the price).

PaddythePlumber

jonnyj wrote: »

Hi all,

Im trying to learn about buying and selling shares over the last few months. I've picked out a few companies to watch and one is Elan.

2 weeks ago there was good news that J&J were taking 18% of Elan and investing heavily in some of its drugs. It wiped 1 billion of its depth in one swoop. I thought this would increase the share price as this new investment made the future of the company look very positive.

Can anybody then tell me why, since this good news came out that the price has been dropping. I know that globally shares are on the downward slope is this the reason or is there another?

Any opinions would be much appreciated, thanks.

Elan gave away 50% of it's share of Bap for a cash infusion in the form of an equity sale. This was a horrible deal for Elan and was an act of desperation born out of it's continued mismanagement. IMO.

padocon

They rose more than any share today. People must be expecting a good Q2. All will be reviled.

jonnyj

Ya they rose by 49c today. Results are out tomorrow.

PaddythePlumber

More management shenanigans.

http://www.reuters.com/article/marketsNews/idINN2014987920090721?rpc=44&pageNumber=1&virtualBrandChannel=0

Onikage

Elan were unlikely to ever have an opportunity to exercise that control-change guarantee. They gave away a clause that may never be triggered in exchange for ready cash.

padocon

Its looking good! Heres hoping they keep rising!

jonnyj

padocon wrote: »

Its looking good! Heres hoping they keep rising!

You looking at the same Elan as me. They closed down 10 cent on yesterday. They were doing well at around 12 o'clock alright.

padocon

jonnyj wrote: »

You looking at the same Elan as me. They closed down 10 cent on yesterday. They were doing well at around 12 o'clock alright.

Must be! 5.69 yesterday