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Vid, for years now I have wondered why with such a high percentage of institutional holdings (long) there wasn't more protecting of the pps. With that, I always thought that there was a plan of sorts (to which we were not in on) and when the time came, there would be a "drawing a line in the sand" of sorts. JUST maybe that defense is now a new normal.
Conversely, heretofore we have seen the shorts at will taking the pps up and down and therefore creating a feeling that we could not rely on the ups (holding) or the downs (recovering) and thus creating insecurity and instability in the psyche of those (like us) who are not with inside information.
Now, IF we are correct with the change in tactics, this could be a huge paradigm shift in both the present and future. For days now, the shorts have tried and tried to do their thing with bear raids and at every juncture, they have been fought off with both speed and effectiveness.
We could be wrong for sure yet we all are enjoying observing "players" (the big boys) fighting for us (the small fish) and I for one am cheering them on. IMHO
Ariafan, Excellent point!!
This (the coming squeeze) is all theory except for the fact that there are $31M shorts and the fact that the pps rose near the end of July (after earnings)with short interest actually going up and also the conjecture of many here who have seen the pps pattern of this stock in the past.
2da for one (as I also believe) posted about the average short pps being around $10 which makes a lot of sense. That is not a fact per se but IMHOpinion a solid assumption.
Like you, I have NO Idea as to why the shorts did not cover earlier this year at a much lower pps before the effect of the management changes, better earnings/sales, news with the science and more happened.
Moreover, "who are the shorts?" for which I also don't have a good answer. My feeling is that they are a combination of the following:
1. Hedge funds totally short
2. Hedge funds and MM's playing both sides.
IMOpinion, they are not retailers who would be open to crazy risk.
No matter the makeup, to me it is pure logic and arithmetic that covering at a higher pps is plain and simple burning money vs. the opportunities earlier.
Thanks for this good question and mystery (at least to me). IMHO
Its around the corner and shorts that don't cover prior to this will be toast!
BTRocks, et al
I agree totally with your analysis along with the many others here too that "get it".
The statement above to me indicates the dilemma that the shorts confront at this time which is IMHO
"They can not cover now at these prices because as soon as they try in mass, the pps will pop. Conversely, if they don't cover, they are awaiting a doom that comes with the news, etc"
It's called being between a rock and a hard place. IMHO
Vid, what just occurred to me about the difference in how Ariad is being traded now (vs until last mid-late July) is that there COULD be a contingent of longs (namely hedge funds) that are protecting the pps by using the REVERSE tactics that the shorts use. Therefore, it might not be all accumulation but rather a large degree cycling in the opposite way than the shorts.
For example, the "shorts" walk it down by jumping the line on the ASK (at a lower level) and then BID it down by covering (buying at the lower ASK level). They did this for literally years at will. Please think about the reverse where "longs" (new tactic to protect the pps) are actually jumping the BID line at a higher level and then selling on the ASK when it gets higher.
The end result would explain where we are now, low volume and the pps NOT falling like in previous times (prior to mid July) and a constant battle where both sides are using their ammunition to protect themselves. However, in the end the shorts will lose as they are stuck (especially now with the intervention of long players) with the propensity for the pps to rise based on news, fundamentals, BO possibility and overall optimism. IMHO and of course too much thinking about what we MIGHT be seeing!!!!
Vid, IMO, you have it EXACTLY right! I can not add anything that would explain it better.
Thanks to you and many others here for their insight, perspective and willingness to share what they know in a way that encourages different points of view.
Ilpapa, It was from May 2015 and the company was Aegerion. Below is the link to the interview except it was cut off before the end of the interview when he was asked if he had to pick one whether it would be Ariad or Aegerion. Most of all, I remember his smile when he said "Ariad".
Maybe someone else can access the entire interview?
http://video.cnbc.com/gallery/?video=3000376506
Vid, today for me was especially significant because it "reveals" and "confirms" how the shorts are handling the increasing demand for Ariad shares. We have been theorizing in the dark for so long about the ups and downs and the increase in short interest in light of the rise in pps shows their hand...big time.
The action on level II is the same pattern, except now the ante is UP because instead of the shorts trying to control the pps with 100 share trades, it is now up in the 2,3,4000 range. What I also see on the ASK side are what look like "real" sellers lining up and then disappearing (not selling) at the last second thus playing with the short tactics of jumping the ASK line with lame low volume selling at a lower pps (at least trying to). I am not sure how that all works but it is a difference that I have noticed and perhaps one of the reasons why the pps is holding UP.
Of course, NOTHING is as good as longs accumulating and with that there are less and less cheap shares to buy.
Obviously there was enough buying to prevent the shorts from selling and bidding it down. It's really interesting to see the long buyers protecting the pps level even with relatively low volume days.
With additional news (hopefully soon), it will only help the cause with more buyers showing up. I agree with 2da that we must be right around the average short pps. If that is the case, something like news could trigger the squeeze and THEN things get out of control for the shorts and their 31M shares very quickly. IMHO
Jess, for sure there are so many here that have a better handle on the internals of Ariad. Most of all, I am interested in what others have to say too.
However, I will say that for sure we are in good hands with PP and Denner who IMHO will maximize shareholder value taking into account all that you mentioned. They for sure will not allow a cheap BO and will hold until a big Pharma type can't wait anymore because of their need to grow, obtain the science and methodology and keep the price under control.
I know that Denner has or has had other opportunities in his career but he might be looking at Ariad as "the one" that makes a name for himself. Last year I remember him being interviewed on CNBC and the interviewer asked him whether the future was in another Biotech company (that he owned as well) or Ariad....his wide smile and answer "Ariad" told it all. I agree now with you more than ever that a BO will not happen until things mature and the time is right. Of course, no one can control the bidding yet I am all for waiting if that's what it takes.
Vid and Jess, I agree that this is great news showing that the shorts are really stuck and can't get out. Obviously during the period when the pps was rising, the shorts continued to short more and cover over and over as we have observed. This will make the squeeze even bigger when it happens. I am so glad that the smart money is not letting the shorts off the hook easily. As you have posted Vid, there is a continual battle each day except now the pps is holding or rising with a real buyers.
Jess, seems like facts get "mixed up" as a normal course of business. IMHO
Thanks you Yankee's and I appreciate your comment, understanding, opinions, contribution and being an advocate of the "real" facts in the context and dates in which they are written.
By the way, my actual opinion is that the short interest has dropped "some" from $30M last reported on July 15. How much? I have no real, factual idea. My opinion gut feeling is based on what I have seen including trading patterns on the Bid/Ask with higher volumes and the pps struggling to break much above $10. The shorts IMHO are fighting like crazy to keep the pps under control by constant shorting and covering (except now) with a stronger true (not covering ) buying presence which keeps them from walking down the pps at will. Yet in all of that, they (the shorts) might have been able to cover SOME.
As I have posted before, I do not think that the smart money and institutions are letting the shorts off the hook (covering cheaply) easily without a squeeze to come. If we do not see a squeeze and see that the short interest is way down, THEN, I might be inclined to think that the shorts were/are hedges (playing both sides by the same entity) and therefore their average pps increased because they covered at a higher price. Again, IMHO
Of course there are other indications that I am sure many here can opine on also at this point. I would love to hear them. IMHO
2da, I Agree that this is about opinions and we are parsing the words "significantly" vs "some". My post was to point out that BR's reference YESTERDAY was not based on recent facts
Of course everyone is entitled to their opinions (I actually agree with you about what we may find out about the shorts in the short interest being "some" down) but not entitled to post as recently factual when it was Old Data
IMHO
BR....in reference to your post yesterday....you stated that a number of sources showed the short interest was significantly reduced to which I subsequently clarified that the source of your statement was OLD DATA from July 15
People here should understand that there is NO factual basis to think that short interest is significantly DOWN
We are all awaiting the Aug 9 short interest report just for the record
OK here is the quote from what you are referring:
Ariad Pharmaceuticals Inc. (NASDAQ:ARIA) was the target of a large decrease in short interest in the month of July. As of July 15th, there was short interest totalling 30,411,404 shares, a decrease of 7.6% from the June 30th total of 32,923,572 shares. Based on an average daily trading volume, of 2,901,567 shares, the short-interest ratio is presently 10.5 days. Approximately 16.5% of the company’s shares are sold short.
This is ALL old data referring to JULY 15 per the NASDAQ published report verbatim
http://www.nasdaq.com/symbol/aria/short-interest
The interpretation is : Aria was the target of a decrease (7.6%) in short interest in the first half of July. ONLY, OLD NEWS
THERE IS NOT a REFERENCE TO ANYTHING or ANY DATA PAST JULY 15. ZERO, NADA
SO, in your post below: "On Twitter there is a number of sources that indicate the short position has fallen significantly. Surely you don't think that the short are still here in mass? Look at the volume.
That wasn't just folks getting long.."
IS PLAIN INCORRECT ABOUT JULY 31
I was wrong too because I thought they were trying to calculate something which wasn't the case either.
THIS IS REFERRING TO THE DATA AS OF JULY 15 ONLY .....THE SHORT POSITION BETWEEN JULY 16 AND JULY 31 IS NOT ADDRESSED and thus the subject of mystery at this point until August 9 when we will know for sure.
The report reads as follows:
As of July 15th, there was short interest totalling 30,411,404 shares, a decrease of 7.6% from the June 30th total of 32,923,572 shares. Based on an average daily trading volume, of 2,901,567 shares, the short-interest ratio is presently 10.5 days. Approximately 16.5% of the company’s shares are sold short.
This in a CALCULATION based on volume and days to cover as of July 15. Since then how would they know REALLY what the mix was between New Longs Buying, Exising Longs selling, New Shorts and Shorts Covering?
With that, I DO NOT believe that anyone legally can know with certainty (NOT a calculation with a lot of assumptions) the short interest between reports otherwise there would be daily information available with an analysis that would be tantamount to inside information. I WISH.
I will await the actual report from NASDAQ on August 9 before coming to a conclusion, thank you.
Could you elaborate about the "twitter sources" showing a significant reduction in short interest? Actually, I am asking to gain another credible source of information about which I was NOT aware for both Ariad and other positions.
Absolutely, all of the "buying" is not JUST folks getting long and is a mix of both buying and SOME net covering where they can. (see the next paragraph)
Conversely, on the sell side (with the higher volume) I DO NOT believe that a significant number of longs are getting out which would have the shorts licking their chops. Rather, I think it is a balance of (the shorts) shorting and immediately covering (yes the tactic of times past) YET now with a strong presence of more NEW true buyers so they can't walk down the pps.
I for one would be very surprised to see a significant reduction of short interest. The definition of significant here would be more than 20% which would still be end up around $24M shares which IMHO is still significant. I am thinking more like 10% at most and that still will not impact the coming squeeze. There is no way that the shorts got out at $9-$10 without a LOT more volume and appreciation of the pps.
It is plain arithmetic with all of the float, institutional, retail,options , etc data that has been posted here many times which shows that there are NOT nearly enough cheap shares ($10 and under) to cover. This is the smart money trading now and they know what they are doing AND the shorts are still in deep, deep trouble.
As always IMHO
Jess, I will second that about Luma and I follow his posts very closely (admittedly I do not understand a lot) and am dependent on the summaries at the end.
This board is great with all that share their expertise or knowledge in an open minded way. More and more, I feel that we as retailers are in this together and are getting closer and closer to the rose after climbing through the thorns. (surely some climbing longer and with more treacherous terrain than others). AS always, IMHO
JohnQ, Your question is interesting and I absolutely DO NOT know for sure about the large block trades.
That said, my feeling is that it involves the so called "dark pools" (the following is from Investopedia re: Dark Pools which are becoming more and more abundant):
"Dark pool liquidity is the trading volume created by institutional orders executed on private exchanges and unavailable to the public. The bulk of dark pool liquidity is represented by block trades facilitated away from the central exchanges. It is also referred to as the "upstairs market," "dark liquidity" or "dark pool." Read more: Dark Pool Liquidity Definition"
This is NOT conspiracy theory stuff but I am seeing it more and more with other stocks where they (large block trades) show up (mostly near the end of the day or in after hours). I think that they (the trades themselves) need to be reported and thus we see it ALL in one shot.
Obviously,on the exchanges that we see on Level II, we DO NOT see 500,000 shares traded at one time because it would show the hand of the Buyer or Seller and therefore they trade in much smaller increments. To me, if it is a Seller they are shorting more (because of desperation) and not other longs dumping cheap shares (knowing that this is going higher) already in their inventory. On the other hand it creates a great price for someone accumulating.
Perhaps we could look it with the following possibilities
Selling
Shorting (very likely in order to keep the pps down)
Selling by institutions (unlikely they are holding for the big money)
Day Traders (would impact the end of the day (pps down) getting out and that isn't happening.
Buying
Longs accumulating (very likely knowing where this is going-UP)
Covering (too much covering at once would make the pps explode)
Day Traders (would have to buy early in the day or on a dip)
At this point, no one is sure about what is really going on. Perhaps all of the above. I am hopeful that we will keep going up without the usual pullbacks of the past for which we need the higher volume and forceful buyers (not letting the shorts walk down the pps). The next short interest report on 8/9 will tell us a lot especially with the 10 days run with the pps having gone higher.
Vid, et al, So right with all the comments (by all contributors) here about the shorts and as you have written there is a new paradigm. Has to be accumulation going on and with the relentless buyers keeping the pps up. For sure the next short interest report on 8/9 will be very interesting given this price action. We have talked about this for so long and now it is happening with the price being supported by new longs and the shorts fighting for their life and an inability to control the pps.
2da's analysis yesterday makes a lot of sense (with an estimate of the average short position) and this must be a pivotal area for both longs (wanting to support the price) and shorts (fighting to keep the price as low as they can).
IMHO the next few days will be ANOTHER key time as in 1. Can this continue with the pps stable or rising? 2. When will the squeeze start because the shorts just can't take anymore upside? 3. Of course there is a possibility of going back and filling the gap YET it doesn't look that way right now...hope that doesn't happen and it becomes a "runaway" gap that never gets filled.
Thanks again Vid as I read yours as if it was what I am thinking too.
Vid you are so right with the different trading action and if you are like me a bit skeptical about what we are seeing or how long it will last. I say that because for so long the shorts have controlled the ballgame and NOW you can see the thick level of buyers hanging in there and fighting for a pps level. Yet as you know, I AM optimistic.
To tell you the truth, I don't know exactly what to make of it and wonder about the balance between true buyers (accumulation) and more shorting/covering as a means of not allowing the price to take off. My opinion is that a lot of pure covering is not happening just because of where the price is and constant battle on the bid/ask. Anyway, clearly it is different and great.
2da, I wonder if you have any way of estimating the average short pps at this time as I felt your comment was right on? This has to be an extremely important level for the shorts to fight for? Also the graph by SIK was helpful as well and puts a perspective on things as far as really how out of balance the pps vs short interest has been for so long.
Jess, Thanks for asking but 2da is preeminently more qualified as demonstrated by his answer about this subject as it really gets into the weeds.
Obviously the whole concept of value is complex and depends on if one is looking at it like a buyer, seller, scientist, business manager (eg cash burn), investor, trader, etc. The characteristics of this company are complex and IMHO not a slam dunk (seeing both the pros and cons) in any way yet I am very optimistic that the current leadership knows what they are doing.
Good management (whether it's a football team, company, etc) makes all the difference in the world and enhances the building of credibility and actual performance is key. And certainly the past was fraught with deception, bad decisions, empire building and all the things that created an environment of doubt. Things have changed big time IMHO.
In the recent increase in the pps, I am buoyed by the increased volume and the true longs supporting the cause and not allowing the shorts to easily play their games. Certainly it is a day by day exercise and open to ups and downs. In any case, as many have written here, it is just a matter of time before the pps gets to a intermediate level prior to BO. My advice to all is be patient and keep the faith.
With that, I really appreciate the contributions here by all and have really learned a lot. Thank you.
Vid, Strong day with relentless buying (not just covering) therefore supporting the pps all day. Great to see and hope that the volume and true accumulation continues as that's what it takes to keep this an honest bid/ask deal (not walking it down on low volume). I wonder if much is changing for the shorts (short interest) other than the grueling and constant pressure on them? Just hope it keeps going like this with steady, reliable price action. IMHO
Vid, I couldn't agree more and surely It is just a matter of time before the squeeze. Of course the key right now are new longs coming in, accumulation and relentless higher volume. If that doesn't happen in the next week then we will have to go through a dip or two before bigger things happen with the pps awaiting upgrades, Japan news, Brig news and more.
I have to trust that the big money knows what they are doing in controlling the pps until the time is ripe when the next level (not a BO yet) can be maximized. On one hand, I wonder why the shorts would risk allowing the pps to go to $9.50 if they could keep it down (with no BO rumors, etc) especially with a 10 day run (which IMHO is a huge difference from past patterns) and on the other hand if they indeed are still in "control" it could be a ploy. Yet, I see the big money accumulation that has occurred in recent days not backing off with any scare tactics either therefore adding to the shorts' dilemma. I know that sounds a bit wishy washy and bottom line neither one of us has a crystal ball.
Like I wrote last week, the institutions of course have a lot of dry powder and when they so desire will set off the fireworks. Most of all, the facts are the facts with the short Interest and shortage of cheap shares along with improving fundamentals therefore patience is the key and I appeal to all here to hold on even though another dip or two may have to be endured. Selling right now and the ability to reload at current levels is a tricky business and I for one am sitting tight. I am buoyed too by the continual higher highs and higher lows on all the charts.
I appreciate the conversation during these perplexing, interesting and ultimately exciting times. Thanks for your contributions, support and kindred spirit. I very much like the way that you think.
Blue, interesting and please tell us more here about how that might impact the short term outlook or technicalities of what we see here day to day ? Seriously, I always want to learn more.
I am assuming that the shorts are NOT retailers and supposedly are the big boys (MM's hedges) who have all of the tools (HFT, dark pools, etc) to implement tactics that we only dream about. Also, what do you think about "naked shorts" and how that might be affecting Ariad in particular? My feeling is if there is naked shorting it is NOT long term and adjusted within days. I am not thinking conspiracy theories or illegal manipulation but rather just the facts of life trading. Thanks
Vid, You are so right in this being a pivotal time for the pps and interaction of the short side. Again, I truly think that right now the continued higher volume(keeping the pressure on) is the key in preventing the bear raids and maintaining a trend upward/or where we are now.
Below are some facts as I see them and only accentuates the true imbalance that the shorts are looking at which would be indicative of their fierce fight until ultimately the real squeeze will take place
Float 171.5M (Tradeable shares , no insiders, ESOP, etc)
Institutions 121.7M (71% - assuming they are not day trading this position)
Options 5.8M (Current Open Interest-must be allocated)
Balance 43.9M (Available to trade, retailers (thats US), day traders, etc)
Shorts 30.4M (Last report who must ultimately buy/cover)
Therefore, IMHO if we are seeing volume of 16M a day (actually average volume over the last 10 days has been 9.2M), and the pps has risen due to new longs coming in (has to be with the shorts fighting with all they have to) then logic would tell me that most of the volume are round trips with shorting more/selling and immediate covering/buying back by the shorts. Bottom line maintaining status quo short interest level....which is OK and will be fuel for the squeeze.
Most of all, one can see that this is an impossible situation for the shorts with very few shares available to cover at current pps levels and that when the pain gets too great the pps will go up quickly get to an equilibrium at a much higher level when true supply and demand will start. One other thing about the shorts is that the current level is NOT about a negative fundamental sentiment but rather being stuck because they didn't cover when they could at a lower level. For me, that is the REAL sign of the imbalance and key here!!!!
Also, I was very impressed with the conference call and how the level of management seemingly has been upgraded significantly. For a relative newbie like me, I just sensed that is was much more credible....no real facts to back that up by the way.
Also, I agree with you about the ultimate BO pps or higher because I don't think that Denner would have spent all the time and effort in making management changes, focused on the science with huge upside and now some real operational results to let this go quickly or cheaply. Of course the unknown is how much the buyer wants it and how quickly they want to take it off the market. The plot thickens with very positive signals IMHO
Vid and Jess et. al. I think it was a very important day today with the shorts throwing everything they had at it and not being able to walk it down. IMHO, the next few days will be critical and hopefully volume (true long buyers) does not dry up because as we all know that is when the games are played. It is interesting to note that with this high volume, gone are the days when they (the shorts) can jump the ASK line with a 100 share order and walk it down. Especially in the last few minutes today they tried that a few times and were swatted away like a dead fly.
I only wish that I knew the change in the short position in the past few days with the higher volume?...no way to know. Logically to me, there is a lot of accumulation going on at these higher prices vs. covering because I am sure they (the shorts) are thinking that they can still cover at a lower pps (otherwise it would have started days ago given the inside info out there). Basically, I don't see them covering a these higher prices (last two days especially) because they think they can control the pps like days past YET surely they are playing with fire.
Thanks for your comment Vid that we are thinking alike as I watch for your posts and appreciate your down to earth, realistic insight with both the science and trading...Jess too. I think that much of the angst on this board (present company excepted) has been because of not fully understanding the power of the shorts and who (they are/were) is in control. As I have said many times here, do the math and with 30M+ shares short out of 180M (with most of the long shares accumulated and sitting there waiting)....that is some fire power which they have used with endless ups and downs. Hopefully, those days are nearing an end and now we really, really know (with substantial operational results, upgrades, more visiility, etc) that it is just a matter of time. Enjoy the show!!
Vid, what I don't understand is why they (the shorts) haven't gotten out earlier when they had a chance at a much lower pps?
Also, I wonder really who the shorts are at this point? If the hedge funds are hedging (being both long and short) for sure they would have gotten out earlier. If the shorts are separate entities or the MM's it is plain stupidity to let it go higher and higher knowing that they day of reckoning is coming albeit at higher highs and higher lows. Like watching money burn.
It perplexes me and just doesn't seem logical along with being very expensive. Nothing is a sure thing in this world YET the probabilities of Ariad at least going higher (no predictions) is very high at this point.
Any ideas, theories or thoughts?
Vid, at 9:45 the Shorts are digging the hole deeper in shorting more to keep the pps in control (Vol at 1.5M in 15 minutes) and at least for right now there are too many new true buyers coming in (not the shorts covering) for the typical bear raid tactics.
Of course this could change short term during the day and we could see a change with the pps lower. At this level around 9 and below the shorts are at least safe (not for long) and others can accumulate.
Again, it is just a matter of time until the squeeze is coming. IMHO.
If anyone is watching Level II Bid/Ask, please know IMHO that any shares on the ASK (sellers) below the 9.00-9.50 range are Shorts who are shorting more in order (desperately) to jump the line in order to keep the pps down.
Conversely, on the BID side at any level it includes more longs (hopefully a lot of them) accumulating and therefore driving the pps up. Also, of course there are shorts covering (buying on the Bid) yet with the shorting on the ASK this (for them) is a dead heat on a merry-go-round. In the end, there absolutely ARE NOT close to enough shares at this pps range for them to cover (over 30M) therefore they are literally stuck with no good way out (to cover cheaply).
IMHO, it is only a matter of time when the Shorts run out of ammunition to keep this going. My hope is that more institutional buying comes in at higher volume "in force" soon so that the serious squeeze begins. Then and only then does it become pure Supply and Demand without the artificial games. It is all good longer term and this may be obvious to many here. IMHO
Jess, Vid, et al, Not to be cynical but yes it is rigged as we are the last to know what is going on.
Also, today and perhaps in the coming days it will be a fight to the death with the shorts trading this with all the tactics in their playbook. Absolutely now it is JUST a matter of time and how they (the shorts) can get out with the least pain. With that, my recommendation is DO NOT be swayed by any dips or erratic trading action because I think it (irregular ups & downs) surely are coming. It may take some days to work out.
Most of all, sit back and remember that now we are approaching the situation from a position of strength. This is a broken record but patience is the key, IMHO. This was written as a reminder to my investor comrades here.
Hogar...with respect "I am not sure what your issue is with the BO word?"
The threads here do and should deal with the many possibilities that are out there for Ariad including science, business, investment, management, history and more. Certainly ONE of those is a BO by a larger company for a myriad of reasons.
To me, Dr. Denner is on board (as Chairman of the BOD, head of Sarissa, activist investor and known player in the Biotech Investment Community) for the following reason only:
To: "Reorganize, regroup, revalue, reevaluate (not necessarily in that order) the company in all areas to create an attractive BO target and maximize shareholder value (and yes he is a major shareholder)".
Whether we like it or not, BO is part of his DNA...or RNA for the science people here. Bad joke!!!
IMHO, this could happen from now until the situation is "right" which means Ariad is positioned optimally and/or the buyer wants it to happen at the right price (the right price being simply what Denner thinks is right).
I for one embrace the endless possibilities and creative approach that the new regime has or is implementing from a position of strength and with patience and a strategy (albeit many factors and moves unknown to us). IMHO
Thanks Vid as both you and Jess have provided much insight into the many possibilities and situations that could be in the future for Ariad.
I very much appreciate the educational aspects, forward look, fact based perspective and staying positive along with being realistic through the many stages of getting to this point. Certainly, it is not black or white yet with brighter days ahead.
Jess, Vid , et al again..
In my mind a BO has a lot of elements including:
1. How much to pay
2. Who else is bidding
3. What are (both parties) getting
4. What happens with timing and if the opportunity is missed
5. In the case of Ariad "what is the probability that trials, etc will be a positive outcome"
Further, I think with the above and more there really is a lot of emotion involved and not just data driven, fact based elements including both science and financial aspects. In just writing that, I am really trying to remind myself of so, so, so many elements and factors that can impact the basis and timing of any major transaction.
In the case of Ariad I see Denner sitting there like a Cheshire Cat who knows what he has with the science, has a strategy, is working the plan and with confidence (not arrogance) doing everything that he needs to do to maximize the outcome.
I actually agree with so many here in understanding (as best I can) the sins of the past, the facts as they are now with the science, trials, outcomes and a history of the previous regime not keeping their word, empire building and some really bad decisions. That said, clearly to me this is a new ballgame with players who are competent (actually excellent) and willing to build an organization with pro's who all have a lot to gain by doing a good job.
Most of all to me, the fact that there is a real commitment (new people and strategies) to make Ariad a "going concern" speaks to me a position of strength (the absolute best way to go when selling something) and not weakness.
In trying to stand back and look at the present, I am very optimistic, hopeful and more curious than ever about how it will play out. Further, I realize that nothing is perfect and that flaws are inherent with anything.
My advice (as I am trying to heed that same sentiment) is to enjoy what is going on understanding that many here have suffered so much for so long. Certainly, I am relatively new and I may have a different take than possibly many here who are underwater and waiting to exit (actually escape) in the green. IMHO
Jess, Vid, et al, Again, I appreciate all here who contribute with logic, ideas, information, fact based theories and more as for me it is essential to keeping the faith and persevering with Ariad in a healthy way.
Like most, I have had my anxious times (albeit almost 3 years now for me) and have come to the following theory of sorts:
1. Denner is patient and knows what he is doing in "staging" both the accumulation of shares and timing along with providing (management & BOD changes along with rolling out the science in a planned fashion) leadership and plan (even though the plan is unknown to us here). Of course he is well known in the industry and the other "players" (institutions) are not only following his lead (and perhaps counsel at some legal level) but also part of the plan. They are all IN at levels that range from the high 4's to the high 7's (maybe 8's in some cases) and in their mind are almost assured of a 2X (it seems that we all agree here at least that a BO would be at least 14-15) at least.
2. So with that assumption, "they" are letting the shorts play their games in the 7-9 range and buying some time in setting the stage with maneuvering (ASCO news, Brig, Incyte Europe, management changes and more) so that they can continue to allow "the plan" to set up. Absolutely, this takes patience and discipline which they can all afford because they know the plan and can all get on board. Let's face it this is perhaps a once in a decade opportunity....."company with a pps in the $20's has their only drug pulled and the pps drops to $2....relatively quickly thereafter the drug is reinstated EXCEPT this provides an ideal opportunity to not only load up but get involved, make huge changes and set the stage for a 3x-XX return on the post "plunged" pps."
3. Now everything is in place and is the good part. There are 30M+ shorts who are temporarily in the way and the "big boys" still have some dry powder to turn the switch at will when the time is right and for sure they are not taking that step until the setup is ripe. All it will take is for more institutional buying to come in and the shorts will be squeezed without mercy as they (the shorts) don't have nearly the amount of ammunition (money to continue their games) as the long players in the mix. IMHO, right now the big boys are playing cat and mouse in allowing the shorts to keep going in the $7-9 range YET in the end when they "want to" the game is over. For some reason, (perhaps out of my intellectual range), the 7-9 range is providing a purpose in buying time, not showing the hand and more in the saga that lies ahead.
4. This is ONLY my take at this moment in time and I am so grateful for all here (many who know so much more about Ariad and who have been here for a decade or more) who have shared what they know and think. As every day passes, I am more and more convinced that very good things are in store. Short term (with the move in recent days) please view with caution as we have watched this movie before (up and down between literally the high 4's at year end to the mid nine's not long ago) as the shorts are STILL in control of the short term pps.
My point in all of this is WAIT with patience. IMHO the bigger drug companies are increasingly pressured to GROW and with that acquisitions are one of the quickest ways to achieve that mandate (literally by stockholders and BOD'S). ARIAD who is hardly ideal (as pointed out by 2da and BR, etc with their previous history, balance sheet and more) IMHO is a very ripe target for all the positive reasons as espoused by many here. The valuation IMHO of Ariad is not about balance sheets or net sales levels but more about it's future potential as an add on for the future stream of expected earnings and volume in a bigger player.
As always thanks for listening and sorry if this got too long. All IMHO
Jess,
Thanks for asking and like you I think that a mezzanine level (mid teens) needs to be achieved prior to any BO.
If I were the acquirer, politically (internal to their organization) it would be better to do a 2X pps vs 3X (or more) which is where we are now. Yet I do agree that it's not happening anytime soon given Denner's propensity and patience in maximizing shareholder value (his vested interested to be exact). That said, another angle is that they (potential buyers) don't want to let it run too much therefore it gets too expensive. Bottom line it is a balance and I am more on your side than a short term, cheap asking price.
For me the last three days is basically a wait and see outcome due to volume not being high enough to allow the shorts to cover much. To be honest, right now they (the shorts) control the show whether we like it or not and this could be a tactic once again to ride the pps up, short more and try to scare off any weak hands (not institutional). Most of the approximately 20M shares traded I have to believe were defensive tactics (not letting the pps get out of control) vs. accumulation by new long positions.
To say the least, the shorts are working very, very hard right now to keep things the way they are...pps ranging. I for one would NOT want to be in their shoes as there is no good way out for them IMHO. How can 30M short shares possibly be covered with the known float and institutional holdings at the current levels? To me it's basic arithmetic unless one is a doom and gloomer thinking the pps might go down to levels way, way under what I think is strong support along with great fundamentals (i.e. The science and management).
Obviously, there are so, so many questions with trading, science and management maneuvers to come so that many different theories could be valid. Most of all, I see blue sky's ahead and that is good. Keep the faith and patience IMHO is the key.
I appreciate so much your input and logic with possible scenarios along with Vid and others here.
Vid, Jess, et al, For sure this is a marathon and there are difficult days in seeing the forest for the trees.
Right now the shorts are in control and that is the way it will be until they get cleared out through what might be multiple exits (e.g. news, a buy out (ouch for them), a squeeze through a large accumulation by a player, etc). My feeling is the average pps for their short position has to be around $7-8 and right now they are in a bind with how to get out of this as it is a cat and mouse game of shorting more, immediately covering and at the same time watching out for large volume accumulation by the big boys. How I would hate to be in their shoes....unless I have it wrong and their average pps is much more
Actually, this pps level is ripe for adding more shares if one has the cash (I personally don't use margin) for I don't see the pps going down substantially even through the games going on. I love that Denner is controlling the show and pulling the strings with new management, his activist acumen and knowing the players in the industry as well. Many here know the industry too and I have to think that his networking and channels are extremely valuable as well as his discipline in not selling out with a low ball offer. As I have said before, IMHO there is a lot going on behind the scenes that we (as retail investors) have no idea about.
Bottom line, keeping a positive perspective (yes, I understand the saga of many, many years of uncertainty and worse) is key and being a minnow following the sharks (the 70% of institutional positions) is how I look at it. IMHO, they know or see something that we don't know and with that I do respect the point of view of all here!!!
Investor Maven, Absolutely right, there is much going on behind the scenes and about which we as retail investors have no idea.
Clearly there many options that are either being proposed or considered. And all of this could and probably does relate to management changes, science and other commercial options including a BO. Most of all, I am glad that Dr. Denner is in control of the proceedings as I absolutely believe that he will maximize shareholder value beyond any other consideration for it is what he does as a professional, activist, hedge fund CEO.
As I have said before, it is like trying to read tea leaves in translating the signals to what "might" be happening. Clearly from the many comments here, "we are in the dark" and stabbing at possible actions that we can not see. IMHO
Vid, ZZaat, Jess, etal, I agree with your position and realize that the shorts are in control in the $6.50-$10.0 pps range. Guess what? Short interest went up and the pps went down in the past 20+ days not because of bad news or any negative change in the company but rather because that is the only way to protect their short position at this time (adding more short shares). Bottom line, this is a fight to stay in the game and they would love to get their hands on cheap long shares right now. It's just not happening as indicated by the relatively low volume.
As I have said before, IMHO, "they" (the shorts) are stuck and there is absolutely no way there are enough long shares (do the math with the float, insiders, institutions,etc) to cover without the pps exploding upward.
For sure, I for one do not and can not predict the scenario when the status quo (this trading range) will change yet ALL indications are that patience is the key and that Ariad is doing the right things to create a much brighter future. Major news will help big time.
My advice is sit tight, don't look at (or be worried with) the day to day pps fluctuations and know that there are NOT a lot of long position shares being sold (volume just isn't there which is very good) as this is low volume trading games from a position (the shorts) of weakness in that they don't have a way of covering 34M shares (or even close to that many) at this price range ($6.50 - $10). IMHO.
Vid, for what it is worth, I totally agree!! Thanks for your perspective and sharing with objectivity about the present and the longer view as well.