Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Feuerstein vs AVXL:
I'm new to this board and to the stock and though I generally avoid messing with biotech stocks, the story here was compelling enough for me to make an exception and buy some shares, so wanted to post a couple of thoughts/opinions:
1) From what I've read, Adam Feuerstein bluntly stated that AVXL paid Biogen to test their drug. Missling categorically and unequivocally disputed that assertion during today's CC. One of them is incorrect. My assumption is that Feuerstein is the one who's incorrect as Missling would clearly have more visibility and knowledge into this situation. Missling also seemed to go out of his way to directly refute Feuerstein's claim. I would think (and hope) that Missling wouldn't be dumb enough to make this unsolicitated proclamation if it wasn't 100% factually correct. Assuming Feuerstein is incorrect, if I were Missling, I would demand a public retraction from Feuerstein under threat of a lawsuit should he fail to do so.
2) The $8 million question: without thoroughly examining the 10Q to make sure that it's not disclosed in there somewhere, I would tend to agree that this money came from a grant or a gift, likely from the Michael J. Fox foundation. Common sense tells me that proceeds from the sale of stock would need to be disclosed, as likely would a governmental grant, however I'm not sure that a gift from a private organization who received no consideration in return from the company they gave the money to would need to be disclosed, or at least not within the normal disclosure period because receiving a gift could have no potentially adverse impact on the shareholders. I guess the other possibility is that they gave their cash balance as of Dec 12th as well as the quarter ending Sept 30th, so I guess it's possible that they received funds as a result of a material event within the past few days but I believe would have 72 hours to disclose the source of the funds if it were a material event under SEC rules.
3) Re: their current cash position and how long it will potentially last: I don't think that Missling could say that the cash on hand will last approx 2 years under the assumption that they will enter into some sort of partnership that hasn't already been consummated. The impression I got is that their ability to run three clinical trials concurrently will greatly reduce the overall cost. I also believe that Missling mentioned something about entering into an agreement with a clinical trial analytics company that would allow them to do trials with a smaller number of patients over a shorter than usual period of time.
One other side note re: Feuerstein vs AVXL is that I believe Missling said that they were going to do a double-blind trial for the next phase of their Alzheimer's drug which is something that Feuerstein criticized them for not doing with their Phase 2A Alzheimer's trial.
My gut feeling is that Biogen is ultimately going to enter into some sort of partnership/combination clinical trial similar to the one they did with with Elan a few years ago for what (if I remember correctly) was a potential combination MS drug. If this turns out to be the case, hopefully there are no unforeseen adverse reactions like there were in that clinical trial...
Based on what? Don't worry, I don't expect a response. That's what I like to call shameless pumping...
I think TWMJF is similarly overvalued. I also believe that the marijuana they produce isn't as good quality as that of Aurora or OrganiGram but that's just what I've heard, I don't know first-hand. I think eventually Aurora will overtake Canopy as the leader in the Canadian marijuana industry, but I wouldn't touch either of them with a 10 foot pole right now because they're both ridiculously overvalued. If I were buying any of them right now (which I'm not because I think the whole industry is overvalued right now), I'd be buying OrganiGram because the valuation in comparison is more reasonable, at least in the short-term.
Thanks for the info. What's very interesting is that when I first bought Aurora at around .75 average the week ending 09/09, I spoke to Cam Battley who was then Aurora IR. I was working on a current model and a future projected revenue and earnings model based on the assumption that they would eventually able to sell all of the marijuana that their capacity would allow them to produce but needed some addt'l info such as anticipated net margins which he was unable to provide at the time. He was very knowledgeable and we spoke for probably 30-40 minutes. He told me a little about his time with Canopy prior to coming to Aurora and gave me quite a bit of good information about the industry in general and even noted that OGRMF and MTTQF were two other companies in the sector that he liked.
Note that at the time I spoke to him, it was already known that recreational use in Canada would likely be passed and it was also known that recreational use and medical use in additional US states was likely to pass as well. Aurora had already announced their planned expansion and new anticipated production capacity so basically since I spoke to him, nothing has changed. The most interesting thing I remember him specifically saying was that he felt that at the time of our conversation (again, when the US pink sheet version of Aurora was bouncing around in the .65-.75 range) that he thought it was fairly valued, and that when it had run to almost $1 a week or two prior that he thought it was OVERVALUED. Wonder what he thinks now that it's at $2.50-$3.00 with no change in fundamentals...
This stock is so overvalued now it's funny. You all do know that there are over 310 million shares outstanding right? That would give this company a market cap of like $750 million and they're doing what, just over $1 million in sales per month. Let's call it $15 million annually. Once their build-out is done, they'll be able to produce much more, but at this point they're only licensed sell a limited quantity to the medical marijuana market. I listened to a Canadian pro-recreational marijuana lawyer on youtube the other day and he said that assuming the federal legislation to legalize recreational marijuana passes this spring, it will take 3 years before the government has the internal framework (taxation, health standards etc) in place to actually be able to enact it which unless I'm missing something means it's going to be a long time until any of these companies will see any meaningful jump in revenue as a result.
Long-term, ACBFF, OGRMF and MQTRF all have a ton of potential, but right now, they all have bubble-like valuations. Congrats to those making money, but I wouldn't hold on too much longer. They hype train will end quickly when people realize how long it will be before these companies will be able to produce any meaningful revenues/profits. If I'm missing something here, someone please let me know what it is.
Market cap is actually like $400 million if you're basing it on fully-diluted share count.
I think you're more likely to see a merger between at least two of these three: Aurora/OrganiGram/Mettrum.
My understanding is that Canopy's products are of lower quality than Aurora's and I highly doubt with Aurora's focus on quality and technology that they'd be open to a buyout/merger with a company many may view as having a lower quality product.
I can't try their products either because I live in CA but I am able to try products from some of the dispensaries out here. If you're ever out here, I'd highly recommend trying the Blue Satellite :)
I would also check out Organigram if you want to diversify a little bit between companies in the Canadian medical marijuana producer market. They also just finished a $23 million bought financing deal (approx $17,500 U.S.) and announced yesterday that they bought another adjoining 10 acres and existing 150k sq ft building on that land. They said production capacity will increase by up to 4X. The market cap on Organigram appears to be only $82,000,000 US vs about $155 million for Aurora. Both companies are currently only authorized to sell 3,500,000 grams of medical marijuana per year and they seem to be two of the lower-cost producers. I do think that considering both of their upcoming expansion of production capacity, Aurora is currently in a much stronger position huge growth as they'll eventually be able to produce (and likely sell) all of their 70,000,000 gram production capacity beginning mid-2018 whereas the best I can tell, Organigram's max production capacity will be around 19,000,000 grams as of now. Organigram also entered a licensing agreement for their oils and edibles today as well. Seems like it's been a pretty productive couple of weeks for Organigram...again, long term I like Aurora better but I think given the difference in market caps currently, I'll have more exposure to Organigram for the short-term and then roll those into shares of Aurora in within the next 8-12 months.
https://finance.yahoo.com/news/organigram-enters-exclusive-partnership-oils-100000160.html
Going to respond to both of your posts here with the facts as I believe them to be: They may actually end up paying up to $39 million (about $30 million USD after applying the currency exchange rate) for CanvasRX. They've already paid them around $3.5 million in cash and almost $8 million in Aurora stock, so they've already given them $11.5 million. The total amount the company ends up paying depends on how many pre-determined milestones CanvasRX ends up hitting over the next 2 years I believe, which they can pay with cash and/or stock at Aurora's discretion.
Here's my understanding based on the #'s:
70,000,000 grams in future production capacity is correct, avg price per gram is actually probably around $7 IMO. So we'd have $490,00,000. However, if you're a U.S. investor (which I assume most here are since they're on the U.S. ticker symbol) all of their figures are in Canadian currency so you have to apply the current exchange rate of .76, then you have $372,400,000 in potential revenues annually at max capacity after the entire new production facility is built out, which will be fully completed in approx. 2 years.
My understanding is that the first 200k sq feet will be completed and producing by summer of 2017 and the other 400k sq feet will be completed in Summer 2018. They already have the capacity to produce 7,000,000 grams in their existing 55k sq foot production facility, so the remaining amount that will be contributed by the new 600k sq foot production facility is 63,000,000 grams. All things being equal, each 200k sq feet would produce 21,000,000 grams per year. Since the initial 200k sq feet won't be on line until mid-2017, cut that 21,000,000 grams in half for 2017, so they should get 10,500,000 grams from the additional 200k sq feet plus the 7,000,000 grams from their existing facility and they should be able to produce 17,500,000 grams in 2017. At $7/gram, they would generate approx $93,000,000 in revenue after applying the .76 currency exchange rate. I have no idea what their net margins will be so I'll assume 10%, and that would be approx $9,300,000 in net income. That sounds great except there are three caveats:
#1) You're going to want to close your eyes for this, but after the latest $23 million capital raise, the company now has 300,000,000 fully-diluted shares. Granted, some of these are options and warrants that would generate additional cash for the company were they all to be exercised, but that's a lot of shares
#2) even though the federal legislation to legalize marijuana for recreational use in Canada will be introduced in Spring 2017 and will likely pass, it likely won't be enacted until at least Spring 2018
which brings us to:
#3) unless the Canadian federal government increases the amount of medical marijuana the company is authorized to sell between now and then, I believe they're currently authorized to sell approx 3,500,000 grams annually until the recreational use legislation is passed and enacted. As the number of people prescribed medical marijuana continues to grow exponentially, it would make sense that they will increase the amount the company (and probably some of the other companies as well) will be able to sell, it's highly unlikely that the authorized amount will increase enough for the company to be able to sell their entire estimated 2017 production capacity of 17,500,000 grams. My guess is that the Canadian federal government will double the authorized amount to around 7,000,000 grams, which is about the amount Aurora is currently producing. So, to make a long story longer, I'd temper my enthusiasm for 2017, but beginning mid-2018 and forward, the company should be starting to generate huge revenues, especially when you start to take sales of extracts into account.
I'm buying a few shares here and there for now so I have some exposure, but my best guess is that these stocks will really start to move about a year from now in anticipation of the huge increase in revenues and profits from the recreational use market beginning in 2018, though they will all probably get a nice bump around the time that the recreational use legislation is about to be passed. In case anyone's interested, my price target for Aurora is $5.50-6.00 (U.S. dollars) within the next 2-3 years assuming everything goes according to plan. My estimate for Organigram is $7.00-7.50 in the next 2-3 years. My estimate for Mettrum is $14-15 in the next 2-3 years. They should basically all be at least 5 baggers, assuming revenues from only the Canadian medical and recreational marijuana market. Long-term, I like Aurora the best. Short term I like Organigram the best and mid-term I like Mettrum the best, but they're all worth investing fairly heavily in within the next year or so IMO. GLTA.
If MGT keeps ripping like this, Cramer will have McAfee on his show within a week, and THEN we get the Cramer Pump. That will be the day to start lightening up a little bit.
To break this opportunity down in the most simple terms: If John McAfee were to have done an IPO for this company through traditional methods, what do you think the market cap of the company would've been after the first day of trading? If ypu think it would be substantially more than $150 million, you should be buying and/or holding this stock. There will be 51 million fully diluted shares when this deal w/ McAfee closes, so at $3 a share, the market cap would be $150 million.
I think if McAfee IPO'd this company pre-revenue through traditional methods now, it would be worth between $350-500 million, which would be between $7-10/share fully-diluted.
People should contact Jim Cramer, this seems like the kind of thing he'd pump. Maybe he'd even interview Crazy John.
People should contact Jim Cramer, this seems like the kind of thing he'd pump. Maybe he'd even interview Crazy John.
I think we all know that the $120 price target is totally unrealistic and not to be taken seriously. It's quite literally based on nothing.
With that being said, at $1.52/share, the market cap of the company (fully diluted 51 million shares after this deal is approved) is $77.5 million. That's just way too cheap for the potential here.
Here's my take on the situation with MGT as I understand it. If any of my statements are inaccurate, please feel free to correct me:
1) IMO this is basically a reverse merger into a shell company. McAfee probably wanted to run a public company again but didn't feel like taking his private company through the IPO process so he went this way instead. I've seen a few examples of this where the stocks did pretty well. One was ONVO. After they did the reverse merger, the stock went from $2 to as high as $12 or so. Another one was an Elvis Presley memorabilia company and that shell company stock went from pennies to close to $20 if I recall correctly, so it can happen. MGT currently having only 27 million total shares changing hands will be very helpful. Yesterday alone every single company share churned one time. I expect as this story begins to get more coverage, a lot of people will see this opportunity the way I do. The volume will only continue to increase and then the stock will come into focus because it's had such a big move. Maybe this could best be described as an upward spiral...
2) Most institutions can't even start buying until the stock is at $5 and you know that they want a piece of the action on this stock.
3) The press release said that D-Vasive was given ~24 million shares, representing approx 47% of the company, so combined with the other 53% of the shares, there will be approximately 51,000,000 shares outstanding when the shareholders approve this deal.
4) Based on yesterday's closing price of $1.27, the market cap of the company is approximately $65 million and is being run by one of the greatest minds in internet and mobile security with an innovative mobile security product just about to launch. He also sold his last publicly traded company for $7.6 billion dollars to Intel. Yeah that too. What do you think this stock is actually worth in terms of market cap? How much is McAfee being the CEO worth, pre-launch of D-Vasive? I think that the valuation will settle in around $300 million and then the share price will fluctuate based on the success (or failure) of the D-Vasive product launch and how much revenue it's generating for the company. $300 million would be about $6/share based on 50 million shares.
5) The chart doesn't matter on MGT right now. It's a better, different and fundamentally transformed company. The chart was based on the fundamentals and performance of the old company, not the new one. Will there be some long-term holders who are just glad to recoup their money now that the stock is running? If they're dumb and don't see the potential here then they will.
I honestly see this as a great opportunity that despite a huge move still has a ton of upside because a market cap of $65 million for this stock in this situation is wayyyy too cheap imo. I think this will probably see $5 in the next week or two and then work it's way up to $6. After that, it's anyone's guess. Good luck and congrats to everyone here who has made good money on MGT over the past few days. Thoughts and/or opinions on this post would be appreciated.
The way the share price is acting, I wouldn't hold my breath Spacen...
Things seem to have gotten really quiet lately, but it doesn't make sense for management to want/let the share price to erode considering that the CEO owns a considerable stake in the company. That being said, I don't understand the lack of a press release for the settlement last week either. They seem to issue PR's for what one would assume (and hope) to be far lesser settlements that one and they released a PR when they lost the US Schrader case, though that was probably more to explain the one day 40% drop in share price to the public. Also wish we could get an update on the potential Schrader injunction in Germany.
If Q3 was good, hopefully they'll release the earnings as soon after the quarter ends as possible to try to stop this downward spiral in the share price....
Unfortunately once again the market doesn't seem to care. We need a large settlement in the worst way, and soon. That's the only thing that's going to move this stock higher and should be pretty evident by now.
Flyers, I guess my confusion is over the fact that we shed like 40% of our market cap over a decision whose potential revenues weren't even included in analyst estimates but yet when we get a win, the stock doesn't recover ANY of the value it lost on the previous negative outcome. If this stock goes down on bad news but can't go up on good news, that's a major problem...
Ed, obviously SOMEONE was selling. And maybe what Doug meant was that given the fundamentals of the company, he didn't know WHY whoever was selling was doing so...do you just come here to start problems Ed, because it sure seems like it.
Ed, that statement made some sense to me because given the volume, there were a very limited # of people who had a position large enough to impact the share price over an extended period of time (who could actually sell without disclosing it immediately) and for as long as the downward pressure had gone on, they didn't have an unlimited # of shares. Frankly, it wouldn't have made an impact on my investment decision either way so it really didn't matter to me whether they were right or wrong.
They weren't talking about red flags, pump n dumps, the company being a scam etc, refusing to provide details about why they felt that way and then acting offended when people got upset with them and thinking they were spreading FUD. If you have legitimate concerns, either state what they are or don't bring them up. You're using all the lingo a paid basher would use while saying that you're long the stock Ed. It doesn't make sense.
MSL, thanks for the response/explanation. I'm not saying I think that Stryker should've settled already or that I don't think they'll settle, I was just trying to figure out the process in Germany and the reason for the muted market response to what I consider to be today's fairly substantial positive news. I was not aware that there would be another infringement hearing, I thought there was only one infringement hearing (which we already won), one nullity hearing (which we just won), and then assuming both went our way, damages would be awarded (with Stryker having the right to appeal). I'm still not sure I understand how/why the market is acting like this is a non-event, but I guess it is what it is. As badly as the stock got beaten down over one trial loss re: patents that we didn't even own, it's disappointing to say the least.
Ed, I have no problem with your views being different than mine. What I have a problem with is you spreading FUD by making provocative comments that appear have no basis in fact and then refusing to explain what made you come to your conclusions and/or make your statements.
You're clearly not a dumb guy and you know what you're doing. What you do here is akin to someone saying they don't feel well and you telling them "well, based on the information, I think it's cancer" and then when they ask you why you think that, you say "I won't and don't have to tell you that".
Hopefully the moderators will take care of it the next time you decide to make what appear to be false statements and then refusing to provide any substantive facts to back it up. Again, I have no problem with you having a different opinion than mine. I'm always willing to hear both sides, but you're not explaining your side, and that's the problem as I see it.
MSL, there are a couple of things that I'm trying to understand (and make sure I'm understanding correctly):
My impression re: the process in the German court system is that you a) have an infringement hearing and if it is determined that the defendant infringed, then you b) have a nullity hearing. If the patent is deemed valid, you've basically won and all that's left is for damages to be awarded. Is there more to this that I'm not seeing, and if not, why is the stock not acting as though MARA just won the trial, which from what I understand, they effectively have?
I would think Doug and his team would have to have had a pretty good idea of Stryker's sales kyphoplasty in the German market was prior to buying the patents....
OK, Stryker infringed and the patent is valid, so now what happens? Assuming that a settlement ISN'T reached, when are damages assessed/awarded? What sort of timeframe are we looking at? Anyone know?
I'm really surprised that the market didn't react positively at all to this news, am I missing something? Is this really an almost total non-event, because I can almost assure that had the patents been found INVALID, we'd be sitting at $1.50 right now. Does this stock move in only one direction?
If you don't believe in Doug and his team, stop whining and just sell. As a % of their portfolio I can almost guarantee I've gotten hit harder than anyone here but I don't come here whining every day.
Pick a side, don't cheerlead when it goes up and then cry doom and gloom when it goes down. Quite simply, this is an investment in Doug Croxall and Erich Spangenberg. You either believe in their ability to pick and monetize winning patent portfolios or you don't. I think history is well on their side or I wouldn't be here. My confidence isn't shaken by one US jury verdict, however they need to execute almost flawlessly over the next 12 months for this to hit even the $9 price target Roth has on it.
C'mon Doug, show us we're geniuses...
Shapes, I actually posted a couple of weeks ago that I'd hate to see what happened to the share price if we got bad news prior to getting good news, but I just didn't foresee (what I perceive to be) an overreaction like this.
In addition to the overall sector weakness and what the market sees as MARA's company-specific underperformance, I think one of the major problems is that a (hopefully former) large shareholder is more of a trader than an investor and has exerted undue pressure on the stock for some time now. If my assumption is correct, someone trading a large volume of shares in a low-float, thinly-traded stock results in what we've seen over the past few months and is a cancer to the company. Ideally whoever it was has sold out and will just go away, because IMO they are intentionally or unintentionally manipulating the share price.
Once this volume dries up, I think we head back to a more reasonable valuation (IMO $4.25-4.50 or so) in fairly short order. While this sucks and is by far the worst day I've ever had in the stock market, this is probably the kind of washout that we needed...
Unless I'm missing something major here, this seems like a total market overreaction to me. I can't believe that losing this single trial would cause MARA to lose 35%+ of their market cap in a single day. That seems totally asinine to me. I was under the impression that this portfolio was more of a German patent play to begin with, and that is still intact.
patentminer, everyone on the management team and the BOD probably knows things about the IP that the public doesn't know, does that mean they can never buy again? Unless Spangenberg is part of or being kept abreast of ongoing developments in settlement negotiations etc he should be able to buy shares on the open market whenever he wants to. Just because someone owns a lot of shares and understands or is part of the industry doesn't make them an insider IMO. I'll ask the question and clarify with Doug on the next earnings call.
Wouldn't Erich Spangenberg be considered an institutional investor, not an insider (I don't see his name listed on the management team or the board of directors)? Assuming that's the case, he shouldn't be precluded from buying due to insider trading rules and could potentially step up and support the stock if he wanted to....
SWAL, the share price is down because management has been unable to reach any settlements with high-profile defendants in any of the larger-dollar patent portfolios in over 6 months. Until they do (or they win a major trial or two), the share price will continue to drop. It's really that simple.
Selling just begets more selling. Until something substantive happens to turn the trend and get the share price out of the toilet, the decline will likely continue. The decline is probably a combination of 10 different factors, but at this point, it really doesn't matter why it's dropping, what matters is what is going to be done to turn it around and just as importantly, when.
If they didn't have to disclose the $13 million in settlements in Q3 after their previous high in revenues had been less than $4 million, I doubt they'll have to disclose any much of any settlements they reach. The best bet is for MARA to just beat them at trial, that way there would likely be no confidentiality agreement and they would have to announce the result.
PM, you're laughing at him for suggesting that the company do something they've done previously, when they had far fewer patents than they do now. If it is such a dumb idea, why did they do it previously, especially when with less patents it would've been more easily discernible to active and potential defendants what they thought the potential damages were on those portfolios?
I think what he's saying is that Doug needs to do SOMETHING to try to turn this share price around given that the stock is down 50% over the past 6 months. With the share price now sitting in the $4's, I don't think it's the right time to be ridiculing people's ideas...
Thanks for the clarification OWK2M. Sounded like Doug thought the rest of the negotiation may take a little while but if they wrapped it all up in one fell swoop, that's great as it's more time they have available to work on other things.
"We're also negotiating an expansion of that acquisition with approximately 40 other assets from the same seller, and that contract right that we have also runs to US cases. That case is going to trial on June 1st and the 2nd trial with those assets I believe will be September of this year. So we've been working hard on that acquisition and we're happy to finally have the first step of that acquisition done".
This was Doug's response to Mike Lattimore's question on the earnings call yesterday (1st question from the QA). Sounds like there is more to come on an expansion of this acquisition...
Before we start with talk of the CEO misleading us, consider this:
Erich Spangenberg owns 18% of the company and just recently locked his shares up for a year as a condition of the Fortress line of credit. He knows a ton about patents and I'm sure that with his roughly $15 million stake in the company, he's keeping a close eye on things, so if Croxall is misleading people (which I would out the odds at about 1%), he's misleading someone with whom he's had a long-standing business relationship and who is a helluva lot smarter than you or I.
Like I said before, these things just take time. I have no idea what earnings will bring tomorrow. My guess for revenues is about $4 million. I added more shares yesterday and rounded out my position today. I'm tapped out at this point and believe Croxall delivers the goods soon.
Maybe a stake in this Schrader patent is what the Fortress $ is being used for?