Lemelson Capital Comments On Large Institutional Selling In Shares Of Ligand Pharmaceuticals Inc. (LGND) Amidst Company's Insolvency And Mounting Going Concern Risk
8/25/2014 1:41:38 PM
Ligand's largest shareholder announces liquidation of 484,524 shares
MARLBOROUGH, Mass., Aug. 25, 2014 /PRNewswire/ -- Lemelson Capital Management, a private investment management firm, today released additional research and comments on Ligand Pharmaceuticals (NASDAQ: LGND) amidst the company's unusual and complex debt arrangement under which the firm has assumed $245 million in debt principally so that large institutional shareholders can offload shares of the troubled company in private transactions at undisclosed prices. In what is likely the first in a series of large institutional share sales of Ligand, the company's largest shareholder, BVF, Inc., revealed to the U.S. Securities and Exchange Commission (SEC) this week that it has sold 484,524 shares of the company's stock.
"Ligand Pharmaceuticals is an insolvent company facing severe competitive threats to its key royalty programs that has now absorbed an extraordinary amount of costly debt apparently to allow their largest shareholders to liquidate their holdings as 'going concern risk' at the company grows," Lemelson Capital Management Chief Investment Officer Emmanuel Lemelson said today. "This transaction reaffirms our prior research thesis that Ligand has justifiably lost favor with its largest investors and has dramatically increased the likelihood of the company eventually being forced to seek protection from creditors," he added.
The report on Ligand can be found here.
Lemelson Capital's previous research reports (PDF versions) on Ligand can be found
here, here and here.
Lemelson Capital Management first announced its short position in Ligand Pharmaceuticals on June 16, 2014. The stock has undergone a significant 26 percent correction since. "We reiterate our position that the intrinsic value for Ligand is zero and see these large institutional sales as an indication that our concerns are increasingly broadly held," Lemelson said.
Disclosure: Lemelson Capital is currently short shares of LGND for its clients.
About Lemelson Capital Management:
Lemelson Capital Management, LLC is a private investment management firm focused on deep value and special situation investments. The firm's flagship fund, The Amvona Fund, has been named repeatedly one of the world's top performing hedge funds. For more information, see: http://www.lemelsoncapital.com.
Chief Investment Officer
Lemelson Capital Management, LLC
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