BioCentury
ARTICLE | Finance

Ebb & Flow

May 14, 2001 7:00 AM UTC

While recent buyers of Rosetta (RSTA) stock may be dancing in the tulips over the big premium Merck (MRK) is paying to acquire the bioinformatics company, investors who bought the issue either on the August IPO or in the months following the offering are just getting their heads above the water.

MRK's takeout price of $620 million (net of RSTA's $53.3 million in cash), is $188.8 million above RSTA's post-money valuation of $431.2 million from its IPO. But the deal is $618.9 million (56%) below RSTA's peak market cap of $1.1 billion on Sept. 1, when the shares hit their 52-week high of $38.063...