Page 106 - CL Armchair Case
P. 106
Liquidation: KaloBios
Earlier, in November (13th) the company had said that "it
would wind down operations and liquidate assets”, because it
was running out of cash while developing two potential
cancer drugs, adding that any expectation of strategic
alternatives were "highly unlikely."
Share price at this time, just prior to the acquisition, was at a
low of 44 cents per share. Two weeks after the acquisition
the share price rose to $45.82.
Some days after the acquisition Shkreli tweeted that he
would no longer make his shares available for short-sellers
to bet against the stock, writing:
"I spoke with my counsel & advisers and decided to stop
lending my $KBIO shares out until I better understand the
advantages of doing so," Shkreli said. "I apologize for any
inconvenience this may create in lending markets and I will
probably resume lending at some point.
Happy Thanksgiving!"
The result was that share price almost doubled as a
stampede among those who were short the stock tried to
find shares to cover their positions. Many of these investors
called for SEC action in response to this wild trading. It was a
