Dendreon: The Paradigm Shift

Dendreon (DNDN) is a stock from the backwoods that has moved to the forefront as a new day dawns at FDA. Dendreon is a company introduced to me last year by a friend of mine from the medical device field.

In layman’s terms, what makes Dendreon different? It is probably best answered with questions rather than answers.

• What makes an airplane different than a train or a car?

• What makes a laser printer different than a type writer?

• What makes a microwave different than a stove?

It’s best described as a paradigm shift, from the way diseases were studied, diagnosed and treated in the past. It offers hope for the hopeless by introducing new ways to treat deadly diseases. My interest was solely borne out of desire to make money and has turned into a passion for the Company, its advocates, and its potential benefactors.

Investing in Dendreon has opened my eyes to whole new world of financial manipulation by Hedge Funds, Market Makers, and Brokerages. We have seen analysts put sell rating and a price target of $1.50 on a Company with $1.50 per share in cash. We have seen Doctors who voted 17-0 on safety and 13-4 on efficacy take to outside publications (not peer reviewed). Two of the distinguished Doctors who voted against efficacy wanted a second vote and elected to take a public stance against the approval of Provenge after they cast their votes. (Remember, ‘hanging chads’?). I thought they got only one vote each. Incidentally, both those Doctors had to file for conflict of interest waivers to partake in the panel. Evidently, the other 13 distinguished panelists that voted yes were not competent.

Provenge is an ongoing study in a new era of treatments with a lot of promise. If it isn’t enough to overcome the establishment to new ways of thinking we have a capital market that surely wants to profit from killing this technology.

CASE in point:

• Dendreon has approximately 83 million shares.

• Institutions own over 27 million shares.

• 25 million share with long passionate stock holders.

• 34 million shares sold short as of 4/10/2007. (up from 26.4 million before panel approval)

• Nearly 620,000 call contracts at various strike prices for 62 million shares. Dendreon has traded over 722 million shares in the last 22 trading days, with 83 millions shares of total float. How do you do that?

Disclosure: Author is long DNDN

DNDN 1-yr chart

Comments

[Lockstep In...:]

Well written article. I find it quite amusing. It is hilarious to think how many shares are trading hands, how the dissent has taken to guerilla warfare in outside journals, and to see the direct competition from the hedgies on which way the coin will fall. Does not matter to me. If the stock hits $6.50 before May expiration I make money and if the stock hits $31 before July I make money. The rest is just big boy games.

2007 May 02 12:46 PM

[Karuna Kana...:]

Thank you for the compliment. I am assuming you are hedging with options and you would be absolutely correct in your position. Either the stock would collapse or explode. I think positive news will have the shorts running for cover, except for a small problem. If the longs, and the call owners decide to exercise their options, there aren't enough shares.

We will know in a few days.

BTW, July? Do you mean August?

2007 May 02 03:36 PM

[Cameron Baird:]

On a gut feeling after reading all I could, like you I decided I believed in them and did something very uncharacteristic of me. I bet the Farm at $4.90 two days before the meeting. I will never forget that moment when the market opened again and I watched my bottomline change in an instant. I will continue to roll the dice and so will a select few very close friends. I read the posts in the "groups" and realize how crooked the game is but for once in my life . . . I'm in the right place at the right time" and nothing they can say in the next 7 market days that will scare me out of my long position. They have played the game so dirty . . . . they deserve what they are about to get.

2007 May 05 12:14 PM

[Karuna Kana...:]

As you can see, I am long as well. (Actually in a very big way). The question I asked myself was, what would upset me more. Be wrong and lose my investment, or be right and missed out on the tremendous, and miss out on the incredible upside. I went long....

I remember March 30th as well, when DNDN started trading in the $19 premarket, eventually settling at $12 before resuming it's joy ride back up.

Hey, even Cramer is bullish...anything possible...

Just be prepared, as it will be a roller coaster ride!!
They will and have shaken the weak hands out. This is "very High Stakes Poker".

All the best..

2007 May 05 03:15 PM