John H. Ford's  Instablog

John H. Ford
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For the past 30 years, I have been involved in startups, as a founder, and active investor. My first company was purchased by Johnson & Johnson, which set the foundation for future investments. My level of trading escalated after graduating from college, primarily as a result of my... More
  • Insmed's new deal 3 comments
    Dec 7, 2010 3:34 PM | about stocks: INSM

    Insmed did exactly what they said they were going to do.  They acquired a latter stage Pharma Company, creating dilution, but very little use of cash.  In the big picture, this looks like a good deal.  With $1 billion in revenue potential, now it's just a waiting game.  As biotech companies go, at this point, they look pretty good.  Two to three years for commercialization, isn't that long.  There shouldn't be any more dilution, given that they have enough cash to get to that point.  It looks like their product will be best in class, and should dominate the market.

    Why the selloff?  Well, it could've been a lot worse.  Long-term investors were disappointed that the cash wasn't instantly translated into a higher stock price.  On a conference call, the retail investors expressed their anger quite freely.  In the long run, the share price should do well as a result of this deal.  By long-term, I mean, a couple years.

    If you're looking to get in, there's no rush.  The share price should drift lower from here, providing better buying opportunities.  We could get a small pop following the probable NASDQ extension approval, but I don't expect that to be long lasting, if it even happens.
    Stocks: INSM
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Comments (3)
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  • alpalfha
    , contributor
    Comment (1) | Send Message
    John.This is a terrible deal.Insmed gave away 60 M Aradigm 4 indications a Billion dollars? Impossible.Read about other competitors
    Insmed will be lucky to get 200M for all 4.These markets are orphan( small)250 M shares now and the dilution is toxic
    19 Dec 2010, 03:13 PM Reply Like
  • bazooooka
    , contributor
    Comments (3688) | Send Message
    Seemed to work out ok. Almost got to that magical Billion dollar market cap.
    8 May 2014, 04:31 AM Reply Like
  • John H. Ford
    , contributor
    Comments (86) | Send Message
    Author’s reply » Yes it worked out well, but as is often the case, it took a while.
    8 May 2014, 10:06 AM Reply Like
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