The Question and Answer Board

[frosr6]

Is an article relating to the same sector a company is in considered off topic?

For example I posted the (below article) on a biotech board (I will call xxxx) that had many similarities to the made up xyz company in the article. It was deleted as OT. Curious on why when imo it relates quite well with XXXX.
Btw I did PM admin about it first but no response.

$XXXX is the Biotech Zombie Stock! XXXX is operating on next to nothing and that may be dead and not even know it. In this article we'll take you through the gruesome nature of these stocks and how to watch out for these "living dead" investments. Let's discuss the most common scenario for creating a publicly traded biotech zombie, using the fake company XYZ BIOTECH. XYZ BIOTECH decides to go public with a robust business plan and some initial strong pre-clinical lab tests. Overall, it's a healthy company with no signs of future monsterism. Note: The most common areas for biotech research include cancer, diabetes, AIDS, staph, sepsis, Alzheimer's, skin disease, viral influenza, avian flu and sexual dysfunction. In order to get a strong interest from the start, startup biotech companies tend to attack more common "target" diseases. There is just too much capital required to get a product developed that would treat an ailment that only affects a few hundred - or even a few thousand - people each year. The growing monster must target the greatest number of people possible if it is to survive. Chasing Its Goals, Dragging Behind Now that the monster has been created and is heading toward a target group, it must sustain itself. Biotech zombies will never have genuine revenues, but they may show some revenues on the balance sheet because of interest income, grant payments and study partner funding. (To learn more about the balance sheet, see Breaking Down The Balance Sheet, Reading The Balance Sheet and Testing Balance Sheet Strength.) Now, let's say that at some point down the road, usually after the zombie company has spent 50% or more of its initial public offering (IPO) cash and/or partner grant cash, XYZ BIOTECH drops the ball and issues a news release stating that its star treatment (its lead candidate) has failed to meet primary endpoints. The zombie's heart is failing. Failing to meet its goals means that the robust indications and wonder cure are just not what the previous hype indicated. The XYZ zombie will say it is still evaluating data, and that it is evaluating its molecules for other indications; but, for all practical purposes, the hopes of reaching the major target are gone. At this point, the biotech zombie usually loses its big-buck partner and, as a result, all future financial backing. Therefore, it must decide what it will do going forward. At this point, XYZ will likely scale down operations, reign in spending and usually send some employees and contracts pink slips. For whatever reason, most of the companies that fall into this scenario usually have between $50 to $150 million in net cash after subtracting intangibles from the hard assets, and then after subtracting their various liabilities. But although the zombie has been battered, it's still alive and continues to stumble along after it's goal. The FDA Promotes Further Zombie-ism If XYZ's candidate is granted a Food and Drug Administration (FDA) "orphan drug" designation, which is given if the candidate would have been a treatment for a condition where no treatment currently exists, the increased attention received from the FDA's designation would cause it to become a full zombie even faster. When the FDA gives an orphan drug designation, it generally requires more data and more tests, which is something a partner company or capitalist backer is not looking to support. (To learn more, read What does it mean to have orphan drug status?) It is important to know that the biotech zombie pattern is not usually a result of an FDA request for more data, unless it was for a candidate that Wall Street and analysts thought was a virtual shoe-in. Those zombie companies fall into different categories of biotech investing because they will still have intermittent volatility in their shares whenever they issue pertinent press releases and updates. A true biotech zombie will usually have only one major candidate or a couple fledgling projects. These zombies will stay listed as public companies, but they basically go into a coma and usually will not show any sign of life for a very long time. (To learn more, see Measuring The Medicine Makers.) Read more: http://www.investopedia.com/articles/stocks/07/biotech_zombies.asp#ixzz3fk15nppX