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Last I checked in a partnership there's sharing both in risk and potential successful outcomes. Each side brings assets to the table in a collaborative effort to a meaningful conclusion. Risk assessment was part of this process quite some time ago if one has been paying attention. Not a characteristic found in flippers. Only thing meaningful is pps. Everyone chooses their poison in this business, it's what makes markets. I'm sure your well schooled on the dynamic.
Well the company with the 37 million seems very confident that they are right and you are wrong. I suspect their vetting process is just a bit more detailed than yours. Of course you could be right, but I tend to follow the money of those who have pretty reliable track records when it comes to this sort of thing. Norvatis does not throw money around foolishly. I would say they just want Xoma to bring the process along since the infrastructure is in place and they are just paying to play once the approval eventually comes. The company doing the heavy lifting will then get to the end game they are looking for. Take a good hard look at Novartis to see what their track record is with this type of arrangement. Why they enter when they do, their methodology and strategy employed and you will understand better why this is such a great deal. I know most won't, and that's okay. This is not my first rodeo with Norvartis, not by a long shot. Yesterday I mentioned one other company they have a similar arrangement with. Use the weekend to study and it will become clear, or at least it should be. If the focus is solely on the day to day movement of the pps of Xoma, well good luck with that and have a lot of stomach antacid medication handy, you'll need it.
Going back to last week I had discussed my thoughts about what the 3rd quarter results would be and how that would reflect in the price. When the silly talk of an imminent buyout gained momentum here, I did my best to tone down those expectations which were unrealistic in every sense of the word. Naturally the price rose in anticipation of the rumor, which set up the classic buy the rumor sell the fact reaction. I've noticed on some of the blogs that most people see yesterday's action for what it was, pure manipulation. Talking about missed earnings for example is meaningless since xoma is not a commercial operation yet, but when a reason is needed to banter about to justify a move in either direction, that reason is found. Past failures is another classic ploy to use even though past performance is never indicative of future results. Read your brokerage agreement if your unclear on that one. Talking about the pipeline products that are not the main focus is meaningless as well. Varian and Rubin et al made their going forward focus crystal clear on Thursday. Makes no difference to the haters or shorters, they will always play that side. The stupid talk of pink or grey sheets listing is beyond ridiculous, but expected. Xoma has locked in a major partner who put up big cash and backing. If you think for one second that Norvatis strokes a check that size with benchmarks that were designed to be attainable all for the fun of it, your blind beyond belief. Companies build their band by acquiring or partnering with companies that expand their suite of products. You want to know where Xoma is headed, then follow the money that Norvartis put up. Also to dismiss the work of the Researchers/Scientists/Technicans involved in these efforts is not only a disservice to them, but an insult to the patients who suffer these diseases and are hoping and praying that effective treatments or cures are forthcoming.
But this is not about any of that to some, profits trump all. I'll repeat again, if you have a longer term view, fine. If trading is your thing, fine, but all this doom and gloom talk is just flat wrong.
The SEC won't do anything but offer lip service. How many times were they warned about the Madoff mess? What was done? Nothing. Would be a wasted effort. Yes news would be nice, but we aren't getting any here for a bit. What happens next week? Same thing that happened after EyeGuard B. Some trading range gets established in the next 2 weeks most likely, and we go back and forth until the fourth quarter results are CC'ed. So you can wait, flip or whatever for the next few months. Boring times ahead.
Not happy about it either, but seen it so many times over the years and nothing will ever be done about it due to the money it generates and the influence it buys. No pressure to change it so no change can be expected. They know they can operate without fear of consequences. Just the facts of the game. Now at some point comes the push back up to profit on that side, and guess who will become a cheerleader. Hard one I know.
This will be a flippers paradise for the time being. If that's the game some play, then it's game on. Maybe a bounce Monday, maybe not. We will see. All recent longs before today are now effectively stopped out. No one left I would suspect. Job well done by those with the power and control.
If you look at where we opened, 1.51, that was still above where xoma should have trading imo. I had the price about the mid 1.30's. Being in the high 1.70's and above was way out of my range and you could clearly see that on the chart moving average as well. Strong moves in either direction have to be supported by strong buying or selling after the fact. Too much buying on rumor leading up to yesterday which I warned about. Today's action is no more normal than was the run up. Now time is needed to correct this mess and find some balance. It will be a traders stock for the foreseeable time being, which I've already mentioned. Fundamentals will give it a foundation in due time. No one knows when.
They are just doing their job, like all the other articles that will follow or be regurgitated for the next little bit. They know what the timelines generally are so they play on that. We are in what will be for the foreseeable future a trade phase that allows for scalping profits on both the long and short sides. Usually when things seem at their worst the trade goes positive. Likewise when things become euphoric the trade goes negative. It's pretty easy to pick up the flavor after any strong move up or down. What you can never know is when the range will be established. Is today going to set the bottom range? Next week? Week after? Where does the top get set at? So on and so on. Solid institutional ownership, solid partner with financial backing, motivated management stressing the point about being undervalued. Does not matter today because the price got ahead of itself for the wrong reasons and the short position. Make no mistake, Xoma is moving from a development Biotech into a commercial operation. Dedicated researchers, strong affiliations being nurtured for a good while. No burned bridges. Means nothing today. Those with the power have the control and the result is what you see with today's price action.
American City Business Journals, Motley Fool, and others will as they always do pile on. Factor it all in and it's part of the process. Increase cash position, streamline operations and solid partnership mean nothing when the process is in play. Motley Fool notes Xoma is not a commercial operation, who knew? Long time for meaning ful results, who knew? Nothing changes since the old tactics still work just fine. If it ain't broke, don't fix it.
Short positions are never exposed on small stocks unless you want to tick off the powerful with money. That's the game. So the question becomes do you feel more confident being short or being long? Short selling works because of control. What do you think Norvatis may know? They put up the money for what reason, hope?
Think of it this way, after the EyeGuardB results, Xoma became a fixer upper project. It has now been remodeled into an attractive piece of property that now has much added value. Once the value is realized, the price goes up. As far as the chart goes, yes the stock got ahead of itself a bit, but that tends to happen when unrealistic expectations are forced into the conversation. So let's put the talk of buyout on hold for now. It was not a possibility now, and it won't be until at the absolute earliest this time next year imo. That is probably to optimistic of an estimate as well. The focus needs to be on the pipeline development and how the finances are deployed. Everyone got a clear message on both yesterday which should have left everyone with a strong sense of confidence going forward. A development company like Xoma is now moving into the commercialization of its pipeline with a strong partner pledging full support and backing that up financially. I encourage you to really look hard at the history of Norvartis and its deals of this type and find any negatives and give me an education. I feel confident your efforts on the negative aspect will bear no fruit. Only 3 mechanical parts to any investment, enter, mark time, exit. That's your part initially. Mark your time by knowing as much about your investment as possible. Like the property example I used to start this post, I'll end with this. You own an asset. That asset has been marked down due to market conditions like in a real estate cycle which can be vicious. But even in a weak market, that does not change the physical appearance of the asset. You now add value when conditions like supplies are priced to sell due to weak demand. Value is added at bargain pricing. You then wait for the Market conditions to change, which they always do. Value then is realized at some point and you sell under much more favorable conditions. Yesterday all changes added great value. Today that value is not realized.
Hard to tell, both would not surprise me. How do they get away with It? Whose going to enforce it? No one. They have money and power. A winning combination since the beginning of time and will be until the end of civilization. Let the process play out like it always does. Let xoma do its thing and the stock will react accordingly. What has fundamentally changed for the worse since yesterday? Nothing. Xoma has a large but falling short position like it or not, and that needs to be corrected before the stock moves back up to where we know it should be. Time is on the side of the longs, but not short term. I've talked about this a lot lately.
Now the volume is kicking in as the price moves down. You have your answer as to what is going on. They have a lot to cover. Part of the process. Never fun, but necessary. Buy the rumor, sell the fact and cover.
I also think it will take a bit longer, maybe a week or so. So far volume is to low for all the positions to be cleaned out. When you know you have a friendly partner on your side, you can take your time. They do this all the time. Meanwhile the emotion builds up on the retail longs and they usually capitulate. It works, they know it and take it out of their toolbox time and time again.
Yes, set mental ones that only you know about. Putting them with your broker is like showing your hand in a card game, not to smart. With the gap down this morning, depending upon several factors it will be interesting to see when the gap gets closed, today?, several days?
Lots of stops being hit, more to come. People generally use 15-25%. Now the MM's wait to see how many more will show up. Could take all morning or all day, no one knows. It's days like today that make or break you. Again market history teaches us that most will break. Cycle of life in the investment world.
Between yesterday's after market and the pre market, a lot of shares have moved. Much more to come as they clean out the short side. Strong move down to start.
Classic case of short sellers hanging around too long. They may have help in the early trade to get out without to much blood lost maybe, but those shares will be bought up quite quickly. Watch the volume and size of the blocks traded in the first part of this morning. Market Makers always allow for the flushing to be completed. Question is at what price? If enough of the MM's want shares for the long side, they will want them as low as possible. The tug of war will be competing with the retail side. Typically the MM's win those battles. It all depends on where the pivot point is. The price in theory can move down to hit the majority of stop losses if anyone is crazy enough to have placed them with their broker for all to see. That's what will dictate where the price goes today. Whether xoma closes positive or negative is of no concern unless you flip. Long term things are set on a great path with total commitment and focused energy. When such a large short position occurs in a small stock, you must get used to the ebb and flow associated with what happens when fundamentals change dramatically one way or the other. Days like what is coming today will put many to the test. Market history teaches us most will fail by allowing their emotions to come into play. The shorts are counting on it. They want out imo. Ask yourselves this, is this stock headed for the trash heap, so I'm going to short it to zero? Or is the path forward based on the facts worthy of my investment long term regardless of the short term manipulative gyrations. Make the call.
As I pointed out all week, any talk of a buyout was way to early. They did pretty much what I thought they would. A pathway was laid out in a very straight forward and easy to understand way. Just by the low number of questions asked, 2, that speaks volume to the clarity of the call. The stock should be clearly on a upward trend, no not runaway as should have been known all week. Steady as she goes. Addressing the needs to rebuild in such a short time frame was quite impressive. That type of action is exactly what investors need to support and reward in companies that act and not just talk. Identify the assets and develop those assets in a sharp focused way, or in JV words, "Laser Focused". Financial responsibility, already having a Plan B in place and not relying solely on EyeGuard B, lightening quick reaction to execute and rebuild/brand is refreshing to see. You now see what good capable hands the company has at the helm in my opinion. Now work the pipeline and help the patients who so badly need the therapies.
As I've mentioned before, if you want to get an idea of what it is like to have Norvartis partner up with you, look at just one of their current deals. Ophthotech is partnered up with them. Look at their pipeline, share price, etc. Then tell me how important this deal with Norvartis could turn out to be long term. So flip, do whatever, does it really matter? Do your research and then tell me how important the webcast today is. Sometimes you can't fix stupid.
When you study the company Norvatis the answer becomes clear. Companies like them with their size have the resources to vet any potential deal and be sure as to what they are getting. Partnerships tend to evolve into components of the acquiring company. A 250 Billion corporation does not need to share an asset, rather make it another addition for their overall catalog of products. Good luck with your research and results for all your investment decisions.
Absolutely, this is a development company whose stated goal is to become a commercial operation. The deal with Norvatis has all the makings of a buyout at some point. Companies like them and big Pharma in general pick the small biotechs to acquire after the heavy lifting gets way down the road. That's the model that has been in play for some time now. Long term the institutional ownership, management ownership, etc, gives pretty good Intel on where this is headed. Make choices with good solid foundations in place.
None of us have a seat in the board room. Rumors are not smart metrics to use when buying a stock any time. Anyone who is buying based on that will have very poor odds of any success in my view. It's like buying a stock before earnings announcements, very risky. I still say the setup is a classic buy the rumor sell the fact. When sentiment and emotion is weighted heavy to one side like I suspect it is here, any reason, real or imagined can be used to justify a strong move against your position. Between now and Friday if the fundamentals don't change, then the price movement will be in the hands of the MM's. They WILL go hunting for stop losses without a doubt. I expect more downside near term unless the company comes out with a big surprise. I do not expect a buyout now. To early in the process. The change of control filing yesterday was interesting, but I would not trade on it. We had our 2 up days for this week in my opinion. This is a long term trade. Results come over the long term, not daily or weekly.
Market Makers played a good baiting game in the pre-market. Any major move there should be be treated with caution. The illusionist succeeds because they have you looking where they want and not where you need to look to see the deception. When a stock price moves significantly away from its moving average that should move you to be cautious and not emotional in entering positions or adding to them. Like driving on the road, the further you exceed the speed limit, the more risk you take on, I.e. Control of the vehicle, getting the attention of law enforcement, etc. The stock price had gotten way ahead of itself and needs to take a breather. You can't win a marathon with a sprinter's tactics. Apples and oranges. The fundamentals on xoma are out there for anyone to interpret positively or negatively. A technical chart is the instrumentation in the vehicle in my above example, the fundamentals are the major components like the engine, tires, brakes, etc. Without the fundamentals, does not matter how fancy or pretty the instrumentation is, the vehicle will not run. Point is to not get caught up in the chart so much when it looks exciting, but rather to use it like a guide to keep you centered and safe. Better chance to arrive alive when you follow the speed limit and stay alert and cautious during your journey. Same principal works with stocks.
Not today.
Much more realistic yes but still improbable in my view. As I've mentioned in the past the Biotechs do not always follow the normal when it comes to their stocks and pps, but that can cut both ways. We will just have to show up later on this morning and find out. The uptrend is in place, but trends have rests and profit taking or stop loss selling during the trend. Best to find an idea you like, ride the trend until the idea stops working, then move on to your next idea. Refer to the facts you know and that are verified. In Xoma's case, the depth of the pipeline, the robustness of it, managements commitment to its development, the support to reach completion with both in house and outside experts. Finances, etc, etc. Momentum indicators are strong. Overbought/Oversold indicators are in need of correcting somewhat. Volume good, price support good. Breakout confirmed. Short position in play causing pain. Accumulation by deep pockets most likely. Management motivated certainly. The list goes on. Pick your favorites, or not. Support or not. Varied opinions and feelings make for a healthy market and the constant tug of war in the world of equities. Have a plan and put it in motion,,,,,, or not.
No chance, none.
Expecting a pull back tomorrow and boring day Thursday until the webcast can affect Friday, then profit taking going into the end of the year.
Lay your money on the table and place your bets. No guarantees, never is.
I said before the price has moved to far to fast and it's a long term hold. There will be a sell off as speculators will run as soon as the momentum slows down. How hard is that to see. Happens every time. Nothing moves straight up.
Not sure I understand what you mean, elaborate further.
A lot of expectations being built in for Thursday. Feeding frenzy stuff, absurd. Buy the rumor sell the fact no doubt. Lots of profit taking on Friday at the least and some give back. Long term pure winner. Short term, buckle up kids, turbulence ahead. Finish your coffee and hold tight, sailing into the mouth of the monster. Like always it will be fun, can't wait!
Just having a little fun PM. It's either that or solitaire on the iPad. Yawn,,,,,,,,,
You were expecting proof? Yeah I remember when I traded my first stock too. This is a long term event here. Anyone expecting a fast rise this week lives in fantasy land. The webcast on Thursday will provide exactly what was announced, and update on the pipeline progress going into 2016. Expectations for any surprises are badly misplaced IMO. At best you get a buy the rumor sell the fact response. If you want short term money, then you should have bought last week and be ready to sell tomorrow or sometime Thursday. MM's look to be giving some cover time to the shorts, others shoring up long positions and speculators jumping in, only to dump just as fast later in the week. This is NOT a runaway freight train, not even close. Seriously?
Good luck with your oxma trade. The rest of us are trading xoma.
Buy before the bell tomorrow and see 10 dollars. This week? Is that what your saying? Come on now. Only a buyout at a large premium would do that. I don't see that, no way Beambe. Yes the signs are strong, but we are not close enough in my view. Hope your right, but I think your wrong.
1.19 level has had several tests and we saw a dip to 1.18. Good buying and large blocks going off when that happened. Now its looking for its next point to consolidate and base for the next leg up. This is the week of the webcast so that could make things a bit squirrelly for sure. So sit back, observe and when things settle a bit we might be able to formulate a better opinion and understanding. For now it's a little wild and that might continue up through Thursday.
Expected, stock is in an uptrend. Overbought conditions can persist for sometime. Clearly it will take a breather at some point, maybe have a buy the rumor sell the fact reaction later in the week then the RSI will get some relief. Sign of a healthy trend. More important to watch the 200 Day and 50 Day movements. This is a long distance journey, so periods of rest should be and will be welcome. The only caveat of course is this is a Biotech, and we all know they don't always follow the rules. Especially when the stock is at a fever pitch and wildness and emotion enter the equation. Keep the horses pulling the cart instead of the cart going rouge on us.
Going up a little fast here B, will pull back by lunch if form holds, then nice close today hopefully. Volume has preceded price and has remained fairly solid. I said that the trend is in place, now all we need is to see the 200 DMA turn up and stay up and we are on our way. Not sure about your buyout scenario yet, but it is following the template for such a outcome. Let's see if any follow through comes by 2016 as the trials and pipeline develop further.
I agree and have mentioned manipulation before here. Let's see how next week goes.