First off, I been following Star since word got out about Anatabine so pay close attention, labor day weekend is over! Also, read my disclosure please.
Last week I wrote a blog post highlighting some key factors that Star Scientific (cigx) shares had been exposed to, including share price reaction to a loss of their on going battle with Reynolds American (which was actually NEVER the largest infringement battle in the world, not even close), poor quarterly reports, and slow sales of CigRx™, a supplement with stars most important compound "Anatabine". I also titled the Article "The future of Star Scientific may be no Future at all" could could happen...This week, I think it’s only fair that we look at the true value surrounding Star Scientific’s shares, and the potential for this “what if Anatabine...” could be a “holy-shit, run for cover shorts” blockbuster reality.
On the Monday after (litigation news), Star Scientific (cigx) shares heated up when they rebounded a whopping 40%(or close to it). This was of course a buying opportunity for some after “gamblers” closed out of their positions by selling the news on the loss of the infringement case. This is a fact; those who bought over the litigation took a pure gamble. Star lost, but shares fell in my opinion due to gamblers and not investors getting out. Investors never got out, in fact, I can only guess that many bought more. The market technically did not get it wrong and investors NEVER bought on the notion of a pending lawsuit. That would simply be CRAZY if they did. Long term Investors in Star still may have it exactly just right. To be quite honest, I never thought the pending lawsuit was a catalyst at all, but some bloggers completely blew that way out of proportion so consider this my correction. I considered it a nice bonus had they won the half on infringement, but I understood that proving infringement was a lot tougher then proving rights to a patent. It's over now, and all those investors in (cigx) are much happy to see it go.
At this point, I think it is important that we bring in Star’s biggest purchaser and their reported steak from last week into the spotlight. Tradewinds Master fund, reported a 17.2 percent stake (thanks proof reader) worth $54.59 million in Star according to an SEC filing here: http://tinyurl.com/3ooodsv. Yes, I'm not bullshitting either! If I’m not mistaken, this is up tremendously from about a year ago. Talk about a believer or a fund with a mission. In any case, they seem to have just ONE big motive and that’s to make a ton of money on their shares, (all 23 million of them) one way or another. Although, there is some speculation over what Tradewinds true motives are (considering we have not heard a peep from Scott Peters and his "off shore fund", and they are Star's largest holder), if and this is a big "if" it is true that Tradewinds Master fund is a true believer in both Star and Roskamp; the company that is doing research on (Anatabine) who also bought shares in the open market at around $4 a share, then we might have something here?
I think it’s imperative that we also talk about the long awaited launch of Star Scientific’s main new “dietary supplement” Anatabloc™. Listen to the sound of that and you will laugh and probably ignore their last PR release, as I almost did. It is true, Star’s PR is not the greatest as once reported by James Altucher here: Star Scientific Just Announced They Cured Alzheimer's Disease and Nobody Cares. Couldn’t they find any other words to title their release as appose to using the term “dietary supplement”. Anyhow, Anatabloc™ is officially launched and you can buy it here.
So, who cares about Anatabloc(NYSE:TM)? Wait, did I just hear you say it may never sell? Well, listen to the sound of this, pretty much the entire world should care. Yes, I said it, EVERYONE should be using this product. Although I said CigRx has not sold, Star Scientific's main compound Anatabine could probably be licensed to all the big pharmasutical companies too and sold under their own names. Talk about a market potential in the trillions. Cha Ching is right! Research is being conducted currently and some has even posted here:
Continued...Wait it gets better (I love this line as you know) and the nail in the coffin (THE FLINT STUDY) will probably soon pay off all investors in Star Scientific. You just better hope the PR is clear! Investors believe, along with some of the reports that are floating around, that the potential of Anatabine could positively have an affect on any disease related to inflammation, (YES ANY) including NF-κB activity, Alzheimer's, parkinson's, arthritis, and other anti-inflammatory illnesses that are currently being studied.
So there we have it folks, this is why Star Scientific may not be a bust after all. This could be the future for Star and if "Anatabine" is all what it's all cooked up to be; Star will have ZERO problem finding the funds to stay afloat. This is their "crown jewel" and investors in Star Realize that and maybe, just maybe, shorts should too.
Disclosure: I still currently hold no position in Star Scientific (cigx). Although I do want to buy shares and would never ever short a stock with this much potential, I am looking for a FAIR buying price under 1.70. To me, Its current price is high and I like to buy the Buffett way (on sale and not at robbery prices). I know what you're thinking so do not all get crazy now on me! I think shares in Star Scientific could be worth anywhere from $40 to $200 if they have what is led to believe they have. If so, I’d probably buy at those levels also, but I want facts! I want to hear the company basically say they have the “holy grail”. I want to hear the Roskamp institute say RCP-006 dramatically reduces Alzheimer's. I want an update from Hopkins (as was once announced in a filing). Will it all come to a head, yes, I think it will…Just a matter of time!
I wrote this blog to the best of my knowledge on Star Scientific and other related research groups and companies mentioned above.
Good luck to all and happy investing!