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BUY SIGA

|Includes: SIGA Technologies Inc. (SIGA)

SIGA recently won a contract worth approximately $500mm or roughly $6/share discounted for time value but lost the contract for the additional 12mm doses worth up to $19/share after a legal battle with one of their major competitors and scrutiny from the government. After the news was announced the stock dropped more than 30%. It seems now that the market is undervaluing the probability that they win the additional 12mm doses, as they are only attributing $2 of value to the potential $19 contract win. This is completely unrealistic given that there is only 1 possible competitor and SIGA is still by far the front runner for winning this contract. Conservatively, the market should be attributing a 25% weighting to winning 6mm doses ($2.38), and a 25% weighting to winning the full 12mm doses ($4.75), and 50% weighting that they do not win the contract at all. That get us to a value of about ~$13/share a 62% premium to today's trading price.