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Adam Gefvert, CFA

 
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  • If Achillion's Hep C Nucleotide Isn't Best In Class, The Stock Is Worth Low Single Digits
    Tue, Sep. 16 ACHN 34 Comments

    Summary

    • If Achillion's nucleotide (nuc), ACH-3422, works as well or worse than Gilead's Sovaldi, there is little use for it in the market.
    • Since May, Achillion (ACHN) has experienced an avalanche of selling by insiders and major holders, and no reported buying by institutions.
    • By the time ACHN can sell its nucleotide (nuc), expected in 2018, there will be a Hepatitis C treatment price war, and the market will have shrunk substantially.
    • Little is known about ACHN's nuc, and it's unlikely it will work better than Gilead's or Merck's.
    • Deutsche Bank recently reported that if ACH-3422 fails, which they say is likely, ACHN's value is between $1.25 (cash) and $4 per share.
  • Holders Of Great Northern Iron Ore Will Lose 30% Of Their Money In 7 Months
    Thu, Sep. 11 GNI 16 Comments

    Summary

    • Great Northern Iron Ore (GNI) is now trading at an astonishing $24 per share.
    • GNI's VP and CFO, Thomas Janochoski, confirmed dividends aren't expected to increase this year over last year.
    • GNI investors will only receive three more quarterly dividends averaging $2.50 apiece, and then a final liquidation payout of, at best, $9.72, to total $17.22.
    • Suggested Short Position Holding Length: 16 days, Risk: Very Low, Reward: Medium.
  • The Professional Diversity Network's New Hard-Selling Strategy To Get Members Likely Won't Work
    Mon, Aug. 18 IPDN Comment!

    Summary

    • The Professional Diversity Network runs on the flawed premise that minorities need a professional network just for them.
    • After being dumped by its major partner LinkedIn in March 2014, the company was left without any meaningful revenue sources.
    • Out of necessity (on both sides), it acquired the National Association of Professional Women (NAPW).
    • The NAPW gets revenues by hard-selling its membership over the phone to unemployed women, and has many scathing reviews on Yelp.
    • IPDN's 65% rise since March has created a good shorting opportunity.
  • Northwest Bio - You Can See This Data, But Not That Data
    Wed, Aug. 13 NWBO 201 Comments

    Summary

    • Northwest Bio has a history of showing data too soon.
    • Now it's refusing to release data when it's appropriate to show it.
    • Failing to release data now means that DC-Vax likely failed and the company is struggling to find something positive by adding "enhancements" to its studies.
    • Now is the perfect timing to short NWBO, as all but the most die hard longs must be getting skeptical.
    • The company is likely broke right now, and needs to do another equity raise.
  • The Odds Of El Pollo Loco Falling Below $30 Are Very High
    Mon, Aug. 4 LOCO 17 Comments

    Summary

    • Widely known companies' IPO stocks almost always go up excessively in the beginning, but give it all back when the excitement is over.
    • Many niche restaurant chains have IPOed in the last year; NONE of them have held 2x the IPO price.
    • El Pollo Loco is using its IPO money to pay off part of its massive debt load, not for opening more restaurants.
    • El Pollo Loco could have a follow-on offering of around $20 per share.
  • Limelight Networks Is In Terminal Decline, $1.50 Price Target
       • Thu, Jul. 24 LLNW 3 Comments

    Summary

    • Limelight's content delivery network is losing customers to the tough competition.
    • Evidence suggests Limelight's competitors offer better CDNs that are constantly improving.
    • Management has made many bad decisions and lacks infrastructure experience.
    • The losses and cash burn will continue for Limelight in the coming years, until it must raise cash or sell its assets for cheap.
  • Why It Will Take Years For Uni-Pixel To Reach Production, If Ever, Meanwhile Executives Will Still Get Rich
    Wed, Jul. 16 UNXL 105 Comments

    Summary

    • Uni-Pixel is a company that, even with the new CEO, is promotional without proving itself in order to get investors' dollars.
    • Uni-Pixel uses the term "pilot production" very loosely when in reality it is far from production.
    • Whether Uni-Pixel succeeds or fails, executives will still get rich off investors' money.
  • Expect A 30%+ Decline In Underperforming eLong When The Buyout Rumors Turn Out To Be False
    Thu, Jul. 10 LONG 3 Comments

    Summary

    • eLong gained 60% over the past month solely on takeover rumors.
    • Ctrip has been taking market share from eLong, and eLong's recent earnings reports have disappointed.
    • Ctrip ruthlessly stole an important partner away from eLong.
    • Expedia, eLong's majority shareholder, says the takeover rumors are false and doesn't want to sell its stake.
  • Uni-Pixel Still Struggling To Advance From A Lab Experiment To A Sellable Product
    Fri, Jun. 27 UNXL 44 Comments

    Summary

    • Uni-Pixel still has no visibility on when it will be able to commercialize its touch sensor.
    • Its operational update press release on June 25th looked triumphant; however, the call had vague, and strange, details.
    • Atmel, another metal mesh touch sensor creator, is also having a hard time.
    • Asian manufacturers have several huge advantages over Atmel and Uni-Pixel.
  • Great Northern Iron Ore Properties Will Likely Fall To $15 Soon After The June 26th Ex-Dividend Date
    Thu, Jun. 26 GNI 6 Comments

    Summary

    • Great Northern will terminate on April 6th, 2015 and the stock will go to zero.
    • The final three dividends, not including June's, and final liquidation distribution will total about $15 per share not taking into account the time value of money.
    • The same price action leading up to and after GNI's March ex-dividend date, is playing out for June's as well.
    • With declining iron ore prices, and increasing expenses of the trust, it's likely shareholders will get smaller distributions than they expect.
  • Keryx Biopharmaceuticals: Baupost Group's New Position Suggests A Possible Takeout And 100%+ Gains
    Tue, Jun. 24 KERX 43 Comments

    Summary

    • In 1Q 2014, top hedge fund Baupost Group started a position in KERX and is now its largest shareholder.
    • Two weeks ago, Idenix announced it's getting acquired by Merck for over three times its share price. Baupost Group owns 35% of Idenix outstanding shares.
    • Worldwide, Keryx's drug Zerenex will likely become the best treatment for chronic kidney disease (CKD) dialysis and pre-dialysis patients.
    • If Zerenex is widely used for dialysis and pre-dialysis CKD patients, KERX's value is $60+ using PropThink's model.
    • In January 2014, Zerenex got approved in Japan for pre-dialysis and dialysis use in CKD patients.
  • Maxim's $22 Price Target On Achillion Is Far From Realistic
    Tue, Jun. 17 ACHN 96 Comments

    Summary

    • Maxim's analyst, Jason Kolbert, has a history of assigning crazy price targets to biotech stocks, and has been wrong most of the time.
    • Yesterday, Gilead came out with news of positive phase 3 trials for its Hepatitis C (HCV) Genotype I drug, that suggests ACHN's protease inhibitor Sovaprevir could be worthless now.
    • Achillion hasn't done any studies this past year for its pre-clinical stage nucleotide, whereas Idenix has been engaging in studies on its phase 2 nuc.
    • Achillion's insiders are selling, and Idenix's biggest shareholder, Baupost, owns no shares of Achillion.
  • Why Big Pharma Has No Interest In Achillion's 'Me Too' Hepatitis C Drug
    Thu, Jun. 12 ACHN 47 Comments

    Summary

    • Achillion's roots are developing protease inhibitors to treat hepatitis C (HCV), not nucleotides. Big Pharma is only interested in acquiring nucleotides.
    • Achillion is way late to the party with its nucleotide, and just earlier this week, announced it's just starting Phase I trials.
    • ACHN is the only hep C biotech stock that ramped up a huge amount on sympathy of the Idenix buyout, but it has no advantages over other hep C stocks.
    • Gilead's nucleotide, Sovaldi, is so successful that it is curing 50K-100K hepatitis C patients per year. The market has no need for Achillion's late entry nucleotide.
  • Gevo, An Extremely Overvalued Ethanol Plant, Has Failed With Its Isobutanol Project
       • Thu, Jun. 5 GEVO 27 Comments

    Summary

    • Gevo has spent $66 million over the past three years trying to retrofit its plant for isobutanol with little progress.
    • In March 2014, Gevo announced it will start producing ethanol, which signifies it has failed its isobutanol project.
    • When compared to the production per year of the other pure play US public ethanol producers, PEIX and GPRE, Gevo's value is $0.20 per share.
    • Whitebox, a distressed lender, lent Gevo $25.9M at a 15% rate and is backed by the company's ethanol plant, its only asset.
  • Retrophin's Press Releases Have A Lot Of Sugarcoating
    Mon, Jun. 2 RTRX 37 Comments

    Summary

    • Retrophin's press releases sugarcoat and hide negatives.
    • Retrophin has taken on debt at high rates, which suggests the company is a bankruptcy risk.
    • In addition to the high rates, the loans are dilutive, as warrants were issued, and some of the debt is convertible to equity.
    • Retrophin announced it's selling another company's drug, but at financial terms that suspiciously aren't disclosed.
    • The CEO made up a new "non-non-non-GAAP" financial accounting term: Earnings Power Per Share. Aggressive use of Non-GAAP measures are a red flag.
  • Khosla Is Going To Rip The Rug Underneath KIOR Shareholders When It Files For Bankruptcy
    Wed, May. 28 KIOR 48 Comments

    Summary

    • KIOR is on life support, just surviving off Khosla's $5 million investment per month.
    • KiOR needs $51.5 million more cash to survive this year, much more than Khosla's $20 million commitment.
    • Khosla isn't buying KIOR stock, he's buying secured senior bonds.
    • One can argue that KiOR is effectively going through bankruptcy right now, and Khosla is buying up the distressed assets with the secured bond buying.
  • Did Bankruptcy-Bound KiOR Fail To Receive Khosla's Expected Investment?
    Editors' Pick • Wed, May. 21 KIOR 23 Comments

    Summary

    • KiOR is likely flat broke right now, and can be forced to file for bankruptcy protection any day.
    • Its only angel investor left, Vinod Khosla, appears to not have given KiOR any funds this month.
    • From KiOR's latest 10-Q, it needs over $50M more in cash this year to satisfy its capital needs.
    • Also from the 10-Q, KiOR has regressed to conducting experimental lab work to fix its plant's problems, and requires $35M in R&D dollars this year.
  • Quantum Fuel System's Business Expansion Is By Necessity, Not Choice
    Editors' Pick • Fri, May. 16 QTWW 38 Comments

    Summary

    • Margins are starting to shrink in Quantum's business of natural gas fuel tanks and systems.
    • Quantum was forced to lose its biggest customer, creating a huge hole in revenue forecast.
    • Quantum doesn't have the expertise or resources to successfully expand in the beginning, and possibly will never do well.
    • Shareholders can expect years of cash burn and share dilution ahead.
  • Capstone Turbine Shareholders Have More Pain Ahead
    Tue, May. 6 CPST 48 Comments

    Summary

    • Capstone Turbine pre-reported its current quarterly revenue miss of 16.4% - it's second worst miss in 13 quarters. 2015 estimates need to be revised.
    • Russian sanctions targeting the energy sector will affect its Russian distributor which represents over 10% of sales.
    • Similar to Plug Power, it did an equity raise because of its overvalued share price, which may be soon followed by a 25% drop like what happened to PLUG.
    • Its cash burn is still high.
    • It failed its financial compliance with its credit facility with Wells Fargo.
  • VisionChina - Chinese Bus Advertising Is A Tough Business To Make A Profit
       • Fri, May. 2 VISN 10 Comments

    Summary

    • VisionChina hasn't and won't be profitable because its gross margins are so low.
    • Advertising on buses in China is a losing business - look at China MediaExpess (CCME).
    • VisionChina needs to find other avenues of income to be profitable, but its acquisition attempts have failed.
    • A settlement from a failed acquisition will likely cause massive dilution to shareholders.
  • You On Demand Is Likely A Zero
    Thu, Apr. 17 YOD 26 Comments

    Summary

    • The stock is likely a donut (worth zero).
    • This is the first widely distributed negative report on the company.
    • Revenues were only $165K last quarter, $300K last year.
    • Management have high salaries.
    • Fully diluted, the share count is 34.7M, for a market cap of $120M, and only 4% short interest.
  • Are LeapFrog Tablets Going The Way Of The Dodo?
    Thu, Apr. 3 LF 28 Comments

    Summary

    • LeapFrog had a horrendous Q413 and guidance which demonstrates its current downtrend.
    • Android and iOS tablets and apps are increasingly targeting 3-5 year olds, LeapFrog's demographic.
    • LeapFrog's apps are more expensive, and doesn't allow Android or iOS apps on its tablets, thus isolating itself.
    • LeapFrog's recent bump in share value since its quarterly report make it a good shorting opportunity.
  • Capstone Turbine's Stock Is More Bloated Than Plug Power's Ever Was
    Tue, Mar. 25 CPST 185 Comments

    Summary

    • Street estimates don't predict huge growth, yet Capstone's valuation dwarfs the fuel cell stocks.
    • The high price of microturbines makes them unsuitable for most prospective customers.
    • Management is highly promotional and overpromises and underdelivers.
    • Is Capstone really a green company?
  • Sky-mobi Is Dominating China's Low-Cost Smartphone App Market
    Thu, Mar. 13 MOBI 20 Comments

    Summary

    • MOBI is cashing in on the mass migration to low-cost smartphones in China.
    • With 50% year on year revenue growth, MOBI has a low valuation.
    • MOBI is taking market share from behemoths QIHU and BIDU.
  • Audience Cancelled 2 Major Investor Conferences - Is It In Takeover Talks?
    Sun, Mar. 9 ADNC 16 Comments

    Summary

    • Audience cancelled its attendance to March 3rd and March 11th investor conferences.
    • This could suggest buyout talks and it isn't well known to the public yet.
    • Audience has a niche, dominant product in the smartphone industry, and its current low share price makes it an attractive takeover target.
  • Microvision's Pico Projector Technology Has Some Big Disadvantages Compared To The Competition
    Mon, Mar. 3 MVIS 42 Comments
  • With No Significant Revenue Streams In Sight, Microvision Will Continue Falling
       • Thu, Feb. 27 MVIS 23 Comments
  • ServiceNow's Market Cap Has Gotten Ahead Of Its Future Growth Story
    Thu, Jan. 23 NOW 16 Comments
  • Organovo Currently Has Nothing In The Works For Tissue Implantation -- Its Main Value Driver
    Fri, Jan. 10 ONVO 120 Comments
  • 2014 Will Be A Tough Year For Renewable Energy Group And Other Biodiesel Producers
    Dec. 20, 2013 REGI 22 Comments
  • Will Unilife Be A Tiny Unmet Needs Developer Or A Manufacturing Powerhouse?
    Dec. 19, 2013 UNIS 23 Comments
  • An Analysis Of Unilife's Products Shows A Weak Business Case
    Dec. 13, 2013 UNIS 38 Comments