Seeking Alpha

Pitbull Trading's  Instablog

Pitbull Trading
Send Message
Strongly believe in Nassim Taleb's theories. Have a strong focus on the market psychology and behavioral finance aspect of equity trading. Prefer longer term trades for best risk/reward profiles. Still believe Buy & Hold strategies can be relevant in the current market with the correct... More
My blog:
pitbulltrading.blogs...
View Pitbull Trading's Instablogs on:
  • Where There's Smoke, There's Fire - Why Prima BioMed (PBMD) Is Poised To Pop

    Prima BioMed Ltd. witnessed furious trading starting around 9:55 EST the morning of November 25th 2013. The shares were up as much as 76% at one point, reaching a daily high of $1.90. This happened to coincide with the CEO's presentation on the company's proprietary Cancer Vaccine drug (Cvac) at an important industry conference in London.

    At the sake of sounding too obvious, someone really liked what they were hearing at this conference. The odds are that this 'someone' has expert level knowledge of the subject matter being presented, and the medical complexities surrounding PBMD's Ovarian Cancer Drug. The incredible volume that pumped life back into this beaten down stock made it evident that this entity had very deep pockets as well. The stock traded 3.8 Million Shares today, which equates to 34X Prima Biomed's average daily volume.

    While a company spokesperson claimed that "All material information has been presented previously in our press releases", I have reason to believe there is more to this price movement than meets the eye. Logically, even though all of the information has been seen before, when the information is presented in a new fashion, sequence, or possibly with just different inflections, you can arrive at very different conclusions.

    The decision that someone(Likely a Hedge/ Private Equity Fund) made today was that this company is severely undervalued at current prices. The orders kept firing in much larger than average volume blocks from 9:55 AM until 1:45 PM. This was not a mistake, a fat finger, or an algorithm gone haywire. This was a somewhat orderly buying program that kept the buying pressure up for a few hour period.

    While the stock did retrace down from it's intra-day high of $1.90 to close at $1.50, it still finished up an impressive 38.89% on the session. This equity had a very strong showing today on what appeared to be little to no breaking news. Yet more shares traded hands today than on any single day for the entire past year!

    After today's events, Prima BioMed appears to be a great example of a financial product with asymmetrical risk. Asymettrical Risk can be seen as "A situation in which the potential for gains and losses on an investment are uneven." The brutal and clear reality of this stock is that it will be subjected to 'game-changing' news in the near future, that which can be extremely negative or positive. This is often the case with Small Bio-tech companies, and at this time PBMD meets this criteria extraordinarily. The downside from here is $0.00, a bankruptcy filing, leaving you with a $1.50 loss on every share you owned. However, if the developments are of the positive variety, you will be looking at a $5-7 stock in a relatively short time frame, and the potential for much, much more down the road. Take a look at the chart of Dendreon (DNDN) circa 2009 for a relevant example of this type of scenario.

    CVAC is the name of Prima BioMed's cancer vaccine for patients in remission, which has completed two human clinical trials, and showed during Phase II testing a 50% increase in progession-free survival to 7.7 Months. Many investors at the time found the results to be overall disappointing, and sold off the stock in a drastic fashion. With a change of investor perspective and the positive anticipation leading up to a December 11th meeting entitled "Ovarian Cancer: Next Generation Imunnotherapies", there is a great chance for more significant share price gains.

    It is quite likely that this stock will break back above $2.00 and toward the $2.30 area it was trading at before the initial bad reaction to the trial results on Sep, 18th 2013.

    There are 3 clear reasons for this to occur within the next month:

    1. The stock has shown a renewed interest among investors, making huge gains on the day on extremely high volume, and closing up nearly 40% on 'perceived' good news. Usually good (and bad) news comes in spurts, and often becomes a trend. I Expect further positive developments to be announced in the very near term.

    2. The stock now meets the criteria for further price appreciation based upon technical chart analysis as well as momentum trading strategies. Additionally, with a small cap equity there is always the possibility for drastic price appreciation with a relatively small amount of money.

    3. The CEO just purchased 14,806 ADR's in the open market this past Thursday 11/21/2013 for $1.07 a share, raising his stake in the ADR issue by 82.7%. The timing of this purchase, coinciding with the more recent price advance, and the apparent 'shifting' of investor perception about this equity all point toward a much higher share price in the near future.

    Disclosure: I am long PBMD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Tags: long-ideas
    Nov 27 10:22 AM | Link | Comment!
  • Which Way is the Market Headed Next?
    With the whipsaw action seen recently in ther international markets, many retail, professional and hedge fund investors are all thinking the same thing. Which way is the market headed next? Do we crash back down to Dow 1000? Or is it possible that the 'speculators' push the markets back up to challenge recent highs? 

    Thinking with the extremely greedy part of my brain I decided that the money would be much easier to make if the market was slowly marched upwards, rather than attempting to crash to further lows. Lets face it, fear and blood were in the streets. Pundits were panicking. Europe is eternally doomed. The USA is no longer considered AAA sovereign credit in a world of easily printed fiat currency. 

    Everyone knows that. The resolve the market has shown in the past few days to battle back from an overnight panic low will absolutely prove that the lows for 2011 are in. I may be a maniac or a pollyanna, but I truly think that now the game is different. Bernanke said safe investments are worthless until "mid-2013" at least. I can smell the greedy money on the sidelines waiting for a chance to put their riches to work. No one likes earning 0% on a CD or T-bill. 

    We will challenge our highs for the year in the upcoming 6 months. The fast money will pile right back in once the theoretical 'all clear' signal is given by Bernanke via QE3 or some positive economic numbers. In the long run, markets want to go up, and money needs to be made. There is always a bubble somewhere, and Bernanke is committed to making sure that our stocks are not going to be the first one to burst.

    Long NCT, HGT, SJT, GAIN, MPB, VLCCF, FRO, JMF (all recent purchases)




    Disclosure: I am long NCT, HGT, SJT, GAIN, MPB, VLCCF, FRO, JMF.
    Aug 11 10:49 PM | Link | Comment!
  • Citron Research Going 'All In' on Short of Harbin Electric (HRBN)

    It is now apparent that Andrew Left and the short sellers at Citron Research have risked their well-known reputation on their continued attack on Harbin Electric. It has been made clear throughout SEC filings, the buyout financing by China Development Bank and other regulatory statutes have been (to date) satisfied. The only thing investors are waiting on is a definitive proxy statement and a date for the vote in favor of the management led buyout, including CEO Tianfu Yang and Abax Capital, as well as other insiders. 


    The past successes of Citron Research have possibly led to a high-level of hubris and shoddy detective work. Many of the accusations are supported by innuendo, guilt-by-association, and selective fact checking. The latest attempt at a 'hit job' came today and the stock was punished severely (being down 19% intraday). As the investors had time to read through Mr. Left's sloppy hit job, the stock ended up recovering and finished the day up nearly 5%. 


    It obviously helped that Harbins' CEO Yang came out and stated a very clear rebuttal of Citron's accusations, saying, "a patchwork of fabricated evidence, falsehoods, selective use of information, and clearly biased and dishonest reporting, showing that the authors' only intention is to drive our stock price down. We are aware that there are over 7 million shares of short interest outstanding as publicly reported. We condemn this attempt to further hurt our shareholders and want to reassure them, once again, that we stand by the accuracy of all our filings with the Securities and Exchange Commission ("SEC"),".


    I understand not being able to change your opinions and 'sticking to your guns', but according to this Bloomberg article, the owner of Citron research (Andrew Left) was, "disciplined by the National Futures Association for accusations in 1995 that he “cheated, defrauded and deceived commodity futures customers,” according to the association’s website."


    "Let he who has not sinned cast the first stones" 


    Mr. Left would do well to remember that sacred script. He is doing what most Americans would consider unethical and shady. Printing half-truths and poorly thought out 'gumshoe detective work' on his website without any clear evidence of any legal wrong doing. This is all while he has a devout horde of short-seller subscribers that are short Harbin Electric. (His firms' track record on Chinese stocks up to date is commendable).


    This is another blatant case of manipulating the psychology of the crowd who simply copy trades without due diligence. A poop-and-scoop, if you will, rather than a pump-and-dump. It appears to most who have watched this circus that Citron Research has decided to roll the dice of its long-term credibility on the outcome of this buyout. The reporting work and facts presented are all but concrete and clearly based on innuendo and misleading information. It is a shame that what started out as a seemingly helpful researcher to investors, now appears to be nothing more than another greedy short-selling outfit all about the cash, not the truth.




    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Aug 04 12:56 PM | Link | 7 Comments
Full index of posts »
Latest Followers

StockTalks

  • The Tide has Finally Turned. The rally is upon us. Get ready for Helicopter Ben to Ride Again! RHP LONG $GST. Undervalued by 50% at LEAST
    Jun 13, 2012
  • $AAPL Now up 45% YTD, Can't wait to watch the upcoming Train Wreck!!! Will be UGLY bc there is no fear of downside. #SorryBagHolders
    Mar 14, 2012
  • Anyone wanting to short this market? Or is it time to abandon ship and join longs?
    Dec 20, 2011
More »

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.