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  • YRC CEO Overpaid At $10 Million In 2014 [View article]
    great article. $10 million for running a barely solvent small company with intense wage pressure on its workers and a massive unfunded pension liability is a total farce. every extra million that goes into this fellow's pocket is a million that doesn't go to hundreds of workers when the pension finally goes bust.
    Nov 25, 2015. 01:49 PM | 4 Likes Like |Link to Comment
  • KaloBios: Worth A Buy Now? [View article]
    update: from the Forbes and Fierce Biotech article it looks like reverse merger is not the plan. Shkreli believes in one of the drugs and plans to develop it. the most cost effective way for him to do that would be to buy the remaining 20% of the company his group doesn't already own and take the company private. When you look at what the stock has traded at over the last year, it's hard to imagine he would need to pay more than $4 to get board approval. That's a big risk to anyone paying double-digits.
    Nov 19, 2015. 05:59 PM | 2 Likes Like |Link to Comment
  • KaloBios: Worth A Buy Now? [View article]
    anyone who shorts this stock now with a float of less than 800k shares is a total moron.
    Nov 19, 2015. 05:42 PM | 2 Likes Like |Link to Comment
  • KaloBios: Worth A Buy Now? [View article]
    "However, if the intention here is to reverse merge Turing into the shell, there could be significant more upside, as Turing just led around of funding that was over $90 million. This likely means that the company is going to be valued at significantly more than that, giving us potential upside from the $20 range to maybe even the $30-$40 range. That valuation is just based on Martin's track record and the current value of his company, and does not take into account any future endeavors that the company may have. In other words, if you were lucky enough to buy the stock in the single digits, you may have just found a long-term retirement plan."

    You have a very fundamental misunderstanding of reverse mergers here. In a reverse merger, the shell, or surviving company, issues new shares to the owners of the operating company. They issue a lot of new shares. Typically the shell is valued at something in the range of $10 million, and all of the other value accrues to the holders of the company that was acquired.

    As of right now, KBIO has no reasonable expectation of being worth more than that. They have no other buyers, and they are effectively controlled by Shkreli. He is not going to give KBIO's existing shareholders 40% of Turing for free.

    Ultimately, when this settles out, KBIO shareholders can likely expect to receive something in the $3.50 per share range ($10 million for the shell, plus the value of the existing assets). Only once the merger has been completed would buying KBIO be a way to participate in the value of Turing.
    Nov 19, 2015. 11:45 AM | 7 Likes Like |Link to Comment
  • The Story Behind Alzheimer's Disease And Anavex's Approach To Treating It [View article]
    Thank you for your service. Fmr AF/USUHS doc myself.

    This is a cool "story," but unfortunately it is a story told by an overly promotional management team with a very murky past, and also a story based on basic science and animal studies with no data from randomized, controlled human studies. It's also roughly the same story the company has been telling since 2008. When a drug has gone basically nowhere closer towards a pivotal clinical trial in 7 years, that is a giant red flag. As several authors have pointed out, this company has enough red flags to open a red flag store.
    Nov 17, 2015. 10:02 AM | 17 Likes Like |Link to Comment
  • Anavex: Response To 3 Recent Bearish Articles [View article]
    Aside from the questionable pedigree of some of the company execs and the claims since 2008 of an Alzheimer's breakthrough (now it is 7 years later and we are still waiting for even some hint of randomized controlled human data to back this up)...

    I haven't ever seen a good company with a real drug be aggressively promoted via penny stock newsletters and internet videos.

    I've also never seen a good company with a real drug have a CEO who makes sensational claims about his product up to and including "so if you or I took this drug, it would improve our memory."

    This company is a farce. Anytime you bet on a company that is being aggressively promoted and promises the moon, you will lose your money if you don't quickly sell to a greater fool. This is just another UNXL or CRMD.
    Nov 16, 2015. 01:49 PM | 7 Likes Like |Link to Comment
  • Premarket Biotech Digest: Anavex Patient Comments, Focus On Science, Horizon Tumbles [View article]
    the proof that these shares were a paid promote is right in front of anyone's eyes to see. There's the e-mail going around to retail investors with the disclaimer that the promoter is going to be paid $200,000 cash, and then there is this promo video from Agora. Good companies with real therapies do not do this sort of thing.
    Nov 16, 2015. 11:22 AM | 2 Likes Like |Link to Comment
  • Premarket Biotech Digest: Anavex Patient Comments, Focus On Science, Horizon Tumbles [View article]
    1. someone has been paid to promote these shares to retail investors.
    2. physician involved in this clinical trial was involved with another clinical trial of "breakthrough" Alzheimer's drug that turned out to be not a breakthrough or even a marketable drug
    3. AVXL has been making claims of revolutionary AD drug since 2008
    4. data presentation was very highly selective; omitted or downplayed the lack of statistical significance of several findings.
    5. this clinical trial was open label; one would expect small magnitude of benefit from placebo effect. exactly what was observed.
    6. AVXL CEO has himself been highly promotional (i.e. standing in front of a slide that showed no difference in normal mice, he said slide showed a difference and further elaborated that this means that if you or me took this drug, it would improve our memory).
    7. other AVXL execs have history with stock promotions.
    Nov 16, 2015. 10:43 AM | 2 Likes Like |Link to Comment
  • Premarket Biotech Digest: Anavex Patient Comments, Focus On Science, Horizon Tumbles [View article]
    "Someday soon, Adam Feuerstein and his cohorts will be investigated, taken out on the streets, and tarred and feathered. I am outraged just by reading that article."

    No, actually, speaking as a physician quite literate in data interpretation and a hedge fund manager quite literate with low quality corporate management teams and stock promotions, Feuerstein's article is exactly spot on.

    I have a hard time believing that a competent physician could seriously believe that AVXL is spewing here. At best, you are sincere but woefully mistaken.

    Your support for AVXL is so egregiously wrong that it has made me question another stock that we are long that you have written favorably about. What if it is just a promotion as well and I just haven't caught on yet?
    Nov 16, 2015. 10:18 AM | 2 Likes Like |Link to Comment
  • Unwired Planet: Big Upside With Built-In Protection [View article]
    Just a quick comment to keep up-to-date:
    - we have not sold a share. in fact, we've added.
    - since MAST initially bought, two good things have happened: (1) the preliminary win in Germany court against Huawei (see the q2 earnings call slide presentation), and (2) the board of directors has been completely re-jiggered to make a board that is clearly full of smart guys who know how to monetize the NOL.
    - in spite of these two good things happening, you can still buy the stock today for less than MAST paid at $1.00. that is insane.
    Nov 13, 2015. 10:36 AM | Likes Like |Link to Comment
  • Otelco: Expect This Stock To Rebound On A New Debt Deal [View article]
    We are long this stock (in fact, we seem to be the largest shareholder). We believe the company is very undervalued considering its immense free cash flow generation, in spite of being a "melting ice cube" sort of business. While we agree with the author that refinancing will be a major positive catalyst, we also believe that the rate at which they refinance their debt will likely be higher than the current rate, which was imposed on creditors by a bankruptcy court.
    Oct 26, 2015. 01:14 PM | Likes Like |Link to Comment
  • 6D Global Technologies: Massively Overvalued Reverse Merger; 97% Downside [View article]
    We are doing pretty well here, but still have a small short position left and cannot entirely uncork the celebratory drink until the darn thing reopens well under a buck and we cover our short. In the meanwhile, still getting charged close to 25 cents per share per month in borrow cost on a halted stock. If there's any sad accredited investors out there who are long the stock and may wish to consider a fire sale, please reach out to us and we'll see if the attorneys can come up with anything helpful.
    Oct 22, 2015. 11:48 PM | Likes Like |Link to Comment
  • Live Oak Bancshares: Massive Unlock, Risk Seeking Business Model, Target $5.58 [View article]
    company missed earnings this morning. better than expected origination numbers but fewer than expected loan sales and lower than expected margins on those sales.

    listened to the call this morning. CEO is off the charts on the BS-meter. we are happily short. can't imagine owning this at 3x book.

    btw, 25% of our portfolio is long-term long positions in community banks, so we understand the space pretty well.
    Oct 22, 2015. 03:33 PM | 1 Like Like |Link to Comment
  • Valeant's Only Mistake: Brutal Honesty [View article]

    this piece is very clear. as much obfuscation as possible was done to hide the underlying owners of Philidor. the individuals who are named owners for the purposes of legal filings all have liens against their ownership placed by a wholly owned subsidiary of Valeant. it's there in the filings in black and white.

    an "option to purchase" is not the same as having a lien against every single named owners' ownership interest. this is clearly a case of Valeant owning the company while attempting to avoid the appearance of ownership.

    those are the facts at this point. facts which Valeant has not even tried to refute or counter.

    my speculation, which is merely speculation, would be that the hiding of ownership was either to hide accounting fraud or to hide insurance fraud. the reason we are not short the stock is that I think there is a good chance that "only" insurance fraud (against private insurers, not government-sponsored insurers) is what is going on here.
    Oct 22, 2015. 10:55 AM | 7 Likes Like |Link to Comment
  • Citron's Valeant Report Is A Lemon [View article]
    Disregarding SIRF, Bronte, and Citron all at the same time out of hand is probably a bad idea. As we commented elsewhere this morning...

    I have a simple rule that has largely helped us to avoid buying fraudulent companies. When management lies to me about something, I don't buy their stock.

    In Valeant's case, why would they say they have "an option to buy" Philidor when it is clear from the Bronte Capital report that Valeant already owns Philidor, and did a tremendous amount of work to conceal that ownership.

    It is also clear from Bronte's work that Philidor lied about their ownership to California regulators, failed to gain licensure, and then set up a new pharmacy called R&O which happened to share the name of an already existing California pharmacy.

    None of this proves the entire company is Enron-esque. But it does prove the company committed illegalities and misled (I would say "lied to") shareholders. And all of this comes after the recent resignation of a CFO.

    So brush it off at your own peril. We have no position. Wouldn't touch it with a 10-foot pole on the long side.
    Oct 22, 2015. 09:27 AM | 6 Likes Like |Link to Comment