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You're at a fruit market. But, instead of just being able to buy apples at this fruit market, you can also sell fruit.
You're not a farmer, so you come to the market to buy some apples and you see two fruit stands. Fruit Stand A on the left
is buying and selling apples at 50 cents apiece. However, Fruit Stand B on the right is buying and selling apples at 53 cents
apiece. People are buying and selling apples at these two stands all the time, and the price at a stand could change at any
moment. But, while you're there, apples are 50 cents and 53 cents, respectively.
You're a smart person, and you quickly
realize that you can buy apples from Stand A and then sell them across the street to Stand B and make a 3-cent profit. But
you have to do it now; you can't wait. So you buy all the apples at Stand A and then run to sell them all to Stand B.
Congratulations.
You've committed fruit-stand arbitrage.
Arbitrage is exactly that: the selling of the same item between two different
markets to make a profit off the mathematical differences in price. However, it's not apples that are traded--the goods in
question are usually stocks, currencies and other securities. Arbitrage happens when you get a stock, usually a common one
like General Electric that's traded on multiple markets (Japan, Hong Kong, U.S., etc¿). The stock is usually worth within
fractions of a penny the same on each of those markets. However, there are often some minor variations.
People who
participate in arbitrage take advantage of these variations--and make a ton of money doing it. As seen in the fruit stand
example, you can make a "riskless profit" from buying and selling apples between different markets.
There are some
big hedge funds that make almost all their money off arbitrage. But, despite this simple example, arbitrage is mathematically
complex--and involves a good portion of risk if you don't know what you're doing. You probably won't be able to participate
in arbitrage directly, but you can always invest in a mutual fund that does.
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Thursday, July 03, 2008
OSI Pharmaceuticals Announces Conversion Period for Convertible Notes
Comtex
MELVILLE, N.Y., Jul 03, 2008 (BUSINESS WIRE) ----OSI Pharmaceuticals, Inc. (Nasdaq: OSIP) announced today that its 2% Convertible Senior Notes due 2025 (the "notes") are now convertible at the option of the holders and will remain convertible through September 30, 2008, the last trading day of the current fiscal quarter, as provided for in the Indenture governing the notes.
The notes became convertible as the Company's common stock closed at or above $35.32 per share for twenty trading days within the thirty trading day period ending on June 30, 2008. As a result, during the conversion period commencing July 1, 2008 and continuing through and including September 30, 2008, holders of the notes may, if they elect, convert the notes into shares of common stock, subject to the terms of the related Indenture. The notes are convertible at the conversion rate of 33.9847 shares per $1,000 principal amount of each Note or an effective conversion price of $29.43 per share. There is currently outstanding $115 million principal amount of the notes.
About OSI Pharmaceuticals
OSI Pharmaceuticals is committed to "shaping medicine and changing lives" by discovering, developing and commercializing high-quality and novel pharmaceutical products designed to extend life and/or improve the quality of life for patients with cancer and diabetes/obesity. The Company's oncology programs are focused on developing molecular targeted therapies designed to change the paradigm of cancer care. OSI's diabetes/obesity efforts are committed to the generation of novel, targeted therapies for the treatment of type 2 diabetes and obesity. OSI's flagship product, Tarceva(R) (erlotinib), is the first drug discovered and developed by OSI to obtain FDA approval and the only EGFR inhibitor to have demonstrated the ability to improve survival in both non-small cell lung cancer and pancreatic cancer patients in certain settings. OSI markets Tarceva through partnerships with Genentech, Inc. in the United States and with Roche throughout the rest of the world. For additional information about OSI, please visit http://www.osip.com.
This news release contains certain forward-looking statements that involve risks and uncertainties. Such statements with respect to OSI reflect the current views of OSI's management and are based on certain assumptions. Actual results for OSI could differ materially from those currently anticipated as a result of a number of factors, including risks and uncertainties discussed in OSI's filings with the U.S. Securities and Exchange Commission.
SOURCE: OSI Pharmaceuticals, Inc.
OSI Pharmaceuticals, Inc. Investors/Media: Kathy Galante, 631-962-2000 Senior Director or Media: Kim Wittig, 631-962-2000 Director or Representing OSI: Burns McClellan, Inc. Media: Justin Jackson / Kathy Nugent, 212-213-0006
Copyright Business Wire 2008
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