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I now realize why Adage and hedge funds like it take such oversized positions in microcap Biotech companies like ADXS. No wonder all these hedge funds want in on the early direct placements from companies like ADXS.
I think the posters here who state that ADXS means nothing to a company like ADAGE because it's so tiny on a relative basis to a $35B hedge fund like Adage are missing the forest for the trees.
By running this up to $30, then crashing it to $3, and then possibly running it back up to $20 or $30 or maybe even more, a major hedge fund can take a micro Biotech like this and generate $100M to $500M or even more in profits, sometimes even more than $1 Billion in companies like this (if they succeed all the way to commercialization).
By running a stock like ADXS up, then down, then up, etc, etc and making $10 to $20 per share in each direction up and down, they operate a virtual ATM machine.
In essence they can make fortunes investing in Biotech companies that begin their lives as $50M to $500M companies. The potential ROI per dollar invested in ADXS is many times greater for Adage versus instead if they had invested their money in Google or Apple.
I have no real desire to defend ADXS BOD or Lombardo.
I am not even sure what to make of Lombardo yet. On one hand, I don't assume he will fail. But on the other hand I don't really see anything in his track record that suggests he is a visionary, high level Biopharma CEO type. I do see a track record that suggests he might know how to sell a company and it's assets off at auction. So the jury is still out for me on Lombardo.
However I don't think it's entirely fair to blame Lombardo for much of anything so far.
If you watched what happened on Sep 6-8 and Sep 11-13 we saw the short cartel implement their plan to crash ADXS stock before Lombardo even had a chance to officially open his mouth.
Here's the reality all of us have to deal with. Those 10M shorts that established their position back in July 2015 were always going to make sure they cashed in at a much lower PPS. ADXS management might have helped them with some mistakes and errors along the way. But outside a sale of ADXS, the PPS was going down regardless. This was especially true if Adage was also in on the takedown.
So I am pretty sure even if we had KITE management about the best we would see right now in our PPS would be $8 to $10. The only reason KITE started rising from $40 was because obviously the major market players got wind of the potential sale of the company and it started running in advance of the final deal.
JMO.
Just to add a point about management. Sure ADXS has made mistakes, and I seriously have a problem with them the last 6 months.
But was KITE management terrible when the PPS was at $44 in 2016? Did they get 5 times smarter and better in just 12 months from 2016 to 2017?
Did JUNO management suck a year ago at $18? Are they smart now because the PPS is $60?
I could list other examples, but the point is that the current PPS of any company does not always reflect true value of the underlying company. The more accurate value could be much, much lower or higher in any given month.
This has been clear, especially now with the benefit of hindsight.
The PPS went up no matter what from January thru June of 2015. Then for the next 2 1/2 year the PPS has been going down no matter what.
This is at least partially explained by the short position going from 1M to 10+M by July 2015. I remain convinced that the plan to crash the PPS has been in motion since then. The short cabal always knew (correctly) that even with great science, the timelines to commercialization or even big deals as ADXS got close to commercialization, were 2018-2020 timeframe.
In other words they knew they probably had a 3 year window to crash the PPS. And so they did.
Now the question is what turns this around? That remains to be determined.
Agreed. The continued hiring most certainly does not make sense if they had no idea by now what future funding sources were likely during 2018.
Each one of these hires represents potential annual costs of $125K-$250+K (depending on level) in salary, benefit, stock compensation, pension expenses, etc.
Depends. The 10+M shorts (at beginning of September) were never a monolithic entity, but that number was composed of different groups or funds with different agendas or different groups that may have been loosely working together.
For example, some of the short position no doubt was / is a reasonable hedge against disaster that fluctuates over time. So the short position will never go to 0.
Fortunately we have already seen a very significant break in the short position and the short position is now at the lowest level it's been as a percentage of the float since June 2015. That is a good thing.
However, the short position is still too large here and probably tells us that in order for more significant covering ADXS needs to deliver some kind of deal that takes dilution off the table for the next 12 months. If that happens I think we see another big block of short covering and the PPS will adjust upward. Maybe not go crazy, but we should be able to get back to $8 or $9 pretty quickly.
If a big deal doesn't happen, or isn't impressive enough, we could see the short position go right back to 9M-10M. That is the risk right now. I think the shorts have put themselves into position to either (1) clear out of Dodge OR (2) come back hard. The final outcome is yet to be determined. JMO.
At this point I don't think there wasn't ever any real bad news, at least in respects to the science. I say that because they still crashed the PPS on best ever GOG results, SPA news, Fast track designation, Sellas deal, Amgen deal, etc, etc.
Sure, critics of ADXS can point to some management and BOD mistakes. They are real, but overblown in relation to the PPS. They can say that cash is now getting low at $80M. But what was the excuse for crashing the PPS when ADXS had $170M?
So for me this crash was pre-determined in July / August 2015. The short cabal correctly realized in 2015 that it was going to be 2019 or 2020 before ADXS was ever going to be commercialized.
That calculus happens at other companies, so it was not unique to ADXS, but what does appear to be different in ADXS is that they had no real friends to protect them. And I strongly suspect that is because their best "friends" in the institutional community were some of the primary participants in crashing the PPS.
They had better info and direct access to management that helped them know exactly where they were at every month in relation to milestones and any developments that might screw up their short bet (i.e. considering sale of the company, etc).
So here we are. Just waiting for the bigger tutes like Adage deciding when it is proper time to begin the PPS ramp up relative to 2018 and 2019 key milestones. I believe our time will comes but that could be 3 months from now or 6 months from now.
I don't know when it will happen but whenever they decide to flip the switch on their algos and have it run in the other direction, we will probably be back at $9 or $10 very quickly.
JMO.
It will be interesting to see when / if they ever let ADXS run free from the boat anchor that have tied it to since late summer 2015.
It's possible our first tell will be if they ever let the chart heal itself and progress thru a few key technical levels versus just one or two (or mostly none) before they whack it again.
Technical analysis may not mean much in clinical biotechs on a fundamental level, but it does mean something to the short contingent. They watch the chart carefully, or their machines do at least. The algos in ADXS seem to have been dialed in to break the chart since July / August 2015 and designed to break the chart and keep it broken.
This scares away millions of potential shares in volume that would be bought by technical traders and allows the short cabal to more effectively control and manage true volume.
Now with the benefit of hindsight I still can't believe how easy it has been for them to crash the PPS. They were virtually unchallenged. And how much money they have made in just this one single microcap biotech. ADXS has been an ATM machine for them. Crazy.
It could be. The first hour today was some real volume, volume that seemed like more than just an XBI related bounce. But most of the rest of the day did not seem ADXS specific and it did seem to start tracking more like the index move.
In the past the cabal that owns this stock has stepped out the way whenever they face real volume and let it run a little. In some cases their algos appear to come in towards the backend of that volume and support the PPS rise and tweak it a little. This gives them a higher level to take it down from at a future date.
At some point I am hoping these guys just take their massive gains and get lost. But I have been saying that for months now. We are in a better place (or seem to be) than we were in September, but still not out of the woods yet by any stretch. IMO.
I absolutely agree with that. Greed goes both ways. I sincerely hope the shorts that are dug in like ticks here end up being every bit as greedy as I was at $25 deciding to continue holding 85% of the my shares and warrants (because I also wrongly believed that $35-$40 was around the corner).
Although I am guessing at least a couple million of the short volume is hedges against long positions. I'd like to see short interest back down below the 4M-5M range before I believed that most of the major (well connected) shorts have covered.
JD, I hear you. It is very possible it could be just tagging along with XBI. It is hard to say, although even when XBI moves up ADXS usually seems to lag on the upside XBI moves but take exaggerated hits on the downside.
And really it's only 10:30am so things can still change dramatically between now and 4pm or between now and tomorrow.
Yes. I was thinking the same thing. I am guessing either some are nibbling because they liked what they heard, or some shorts also got the message that it was time to cover some more and reduce their risk heading into 2018.
Still very early and they have plenty of time to reverse this, but if you look at the blocks being traded today it almost looks like real buying / covering might be happening a little.
I have watched this enough over the last 6 months to think I can identify when they are trying to artificially goose up the PPS for the next takedown. While this could once again go under $3 in the near term, it does appear there is some real buying happening (this morning anyway).
Doesn't mean the carnage is over. It could mean we see some more covering happening over the next couple of months.
Well, then add me to that same list. We can be the Three (ADXS) Stooges together.
I agree. I also thought it was a good update. I wasn't expecting him to be so improved. IMO his first presentation graded out for me like a 2 on a scale to 10. For me this presentation was a strong 7 leaning towards 8. It was a huge improvement.
Now we just have to hope that his accelerated learning curve is also happening beyond the presentations, and is going to start producing tangible results at the operational levels.
Agreed. We are still seeing the same trading tactics deployed since $9.50. They just own this stock and there is nobody willing or able to counter balance it.
Even yesterday if one watched trading we were guaranteed that it would close at $2.99 vs $3. Little stuff like that for months now. The goal is to crush the PPS and any hope along with it.
I really like the Alex Denner suggestion.
For whatever mistakes DOC made, he can't be blamed for his sudden termination by the BOD with no clear successor inside the company. We got Lombardo, who with even a generous conclusion of his resume might suggest he is qualified to auction the company off for sale. Lombardo is not really qualified to sign huge deals that will largely determine the future prospects of the company.
Any future "stud" CEO is going to want a canvas to paint on, not be dropped inside a cardboard box where he is left with limited options to change anything.
At this point Tin, nothing would surprise me. But I still don't understand what the BOD has to gain from allowing this collapse to happen, and worse, even contributing to the attack on their PPS with such bad communications?
We can be certain that the major shareholders have by now all gotten a chance to meet with Lombardo either in person or by phone. I am not sure if he is sharing more details with them than he has provided us retail shareholders, but whatever he has said so far about his near term strategy doesn't seem to be impressing anyone.
Thanks for that info.
But I still don't understand their strategy. It doesn't make sense to me to name an interim CEO and telegraph to the market that the interim guy is staying in place...but keeping the "Interim" label...unless you plan on selling the company.
If the plan is to eventually hire a stud CEO they should replace Lombardo immediately. You don't let some "interim" CEO with no real Bio Pharma experience negotiate and ink the biggest deals in company history, deals that will greatly determine the future structure and potential of the company, and then later go find a stud CEO.
That logic makes no sense to me. In fact it isn't logical in my opinion.
The problem in my opinion is not IR.
What does the "new IR" mean for Hans and Noelle? If anything?
On a PPS cash basis the valuation for ADRO and ADXS is very similar. The difference is that ADRO reported $373M in cash last quarter. And their YOY cash burn was nowhere near as bad as ADXS was.
The reality is that ADXS has burned thru a ton of cash in the last year without much tangible to show for it (yet). And quite frankly, according to DOC, before he was let go, ADXS has supposedly been reviewing European partners for AXAL for 9+ months now, maybe closer to 12.
So unfortunately it seems ADXS has been slow to get a deal completed and announced.
Unfortunately it's even more than that. She was right in June of 2015 when she told me to sell at least half and I convinced her why it was the wrong time to sell that big a position due to upcoming events I was anticipating.
So yeah, totally and completely wrong on my part.
Dawson, thanks, but unfortunately if I was so smart I would have sold everything in the $20's. My wife reminds me I didn't about once a month.
Although for sure we both could be proven wrong, I too believe that EU approval is a virtual slam dunk. The rub of course is the wait time between now and then.
I know, I certainly wasn't pumping it and my comments about near term value of $1B ended up being correct.
But I am okay with admitting I got it entirely wrong with ADXS. Not the science part, the PPS part. I realize now with the benefit of hindsight, that I was wrong to focus just on the science. Many of the milestones I hoped to see in ADXS, and did see, were brutally taken down by the big short contingent.
I kept thinking Adage was Big Brother and protector, but now I think they benefitted hugely from the takedown. I should have paid attention more to how other companies they invested in showed the same pattern (CALA, Puma, etc).
Same with Baker Bros and all these hedge funds. They may love the science too and believe in it, so they take a position. But they know they can run the stock up and take it down over a 2-3 year period. They know they have that time before pivotal Phase III results or commercialization. They make a killing shorting the stock and then flipping and going long if trials go well.
If anything I should have traded more around my core to take advantage of the swings.
So what is your point exactly?
Yes, I believed DOC's comments that he felt ADXS was worth $6B and that he would build and sell the company at that level. It seemed that based on what he did from 2013 to 2015 he was on his way to doing that. I still believe in what DOC was trying to accomplish in principle, and I still believe the ultimate value of the ADXS platform is $6+B to the right company who has the management and cash to properly monetize the platform.
What I didn't know in 2015 was that I was going to be a pawn in a high stakes game run by professionals to short ADXS from $25-ish into oblivion and they knew they would succeed because ADXS was years away from successful commercialization even with perfect execution.
I also didn't know that the sponsors of ADXS, who I thought would be friends and protectors of the PPS were actually maybe the kingpins involved in the big short. So I didn't realize that the ADXS PPS would be crashed from within and without, which left no resistance to the short attack launched in June of 2015.
So I take the blame for not selling more in the $20's sitting on a 2000% return on my warrants and 400% return on my shares (at that time).
Now I don't believe that ADXS will be able to deliver on the promise of an eventual $6B share. I think the PPS currency destruction is so thorough and complete, that the current management might be able to get $750M to $1.25B for the science, assuming Adage is still willing to back them and decides they want to run the PPS back up from here.
I suspect we did. I have been watching big block sells going thru, but on many days I also saw them being bought, but PPS didn't change much.
I had assumed that this was more real shares being sold to cover the short position, with these guys using their proxy accounts to do so and the MMs helping them do it. We saw a lot of this in September and early October. This is why I think the speculation that Adage covered some of their short with selling some real shares could be true.
However what we saw at the end of October was the same higher volume and activity, however the short report yesterday did not show it was covering. Based on the volume and historical comps, we should have seen 500K to 800K shorts covered. We didn't.
That suggests it was real selling with no corresponding cover attached.
But since the information we get is always somewhat obfuscated and outdated by the time we get it, it's always hard to know exactly what happened.
Blue,
In principle I am with you, however this is the same thing you said about the end of October, that they were supposedly covering a bunch but waited until after the 10/13 reporting period so they could get away with it. I also believed that was what was happening during the last 2 weeks of October. It seemed like a natural continuation of what happened in September.
However, that now does not appear to be the case. There was a ton of volume, but not much covering from it. So I do believe that as we get this data, we must adjust our viewpoints accordingly.
And yes, I know the data we get is slow and late getting to us. And I know it doesn't really accurately reflect what might really be going on behind the scenes or how many real shares are shorted or covered. And I know that lack of transparency is intentional and by design to keep retail shareholders in the dark. But it's all we have to go on.
This recent information doesn't change my view or positions yet, but it does raise some concern. At least speaking for myself. We'll see.
Iggy, I totally understand what you have been saying and trying to do. You have spent many months trying to defend and explain how the hedge funds play biotech stocks like a fiddle. ADXS is but one of many microcap biotechs that has been attacked and crushed after a big pump.
ADXS problem seems to be that while they have a good staff of people focused on the science, they may not have the right people steering the ship and savvy enough to deal with the predatory hedge funds and manage communications.
And when I say communications, I am not talking normal communications. Unfortunately because of ridiculous regulations that allows Wall St to rape and pillage biotech stocks, all communications have to be with one eye towards information and the other eye towards protecting the PPS and trying to keep hedge funds off balance. This is incredibly difficult task if you are a microcap biotech CEO with no commercially approved products and no real revenues.
This is the main reason why small microcap biotechs end up getting sold. They can't raise cash because they can't defend themselves against the well organized and well orchestrated attacks on their PPS by hedge fund cartels who work together, so they end up having no currency to remain independent.
With respect I think you are being a little too harsh on management. They deserve their share of blame, especially over the last 6 months, but these guys (along with retail bag holders like me) were screwed as early as January 2015, they just didn't know it.
Don't underestimate just how out gunned and out manned most small biotech management is when it comes to being able to defend themselves against these hedge fund giants who run these pump and crash programs all over the biotech world. These hedge funds plan these crashes and pumps out meticulously. They hire a bunch of quant majors from the best schools who spend their entire days designing and mapping algorithms to hand over to top programmers to code.
If one has been paying attention since June, this takedown has been planned brilliantly, to the day and hour sometimes if you have been watching how they managed the volume and what days they have applied the pressure and what days they have let off.
Since I think the ADXS platform has real value, I am hoping that the same ruthless greed that crashed and burned ADXS into the ground will now have a desire to run the PPS back up the flagpole. However, we have to see ADXS management execute and deliver some real and tangible deals or progress. Whether they are capable of rising up to the challenge remains to be seen.
That's not entirely accurate.
The shorts started this crash in motion back in June 2015. They drove the stock down for over 2 years no matter what the news was. The whole point of orchestrated and dominant short programs is to break the chart and keep it broken, which chases away the technical momentum traders. They want to keep creating margin calls and forced selling, and ultimately to force institutional selling from those institutions not in on the deal.
So yeah, there has been some real selling since June. No question. But just like we have proof now that Adage and Fidelity sold some shares along with Broadfin and Sectoral and others earlier this year who sold, we also have proof that tens of millions of shares were churned by HFT to help the shorts keep driving the PPS lower and lower, and some of that churn was to cover about 2.5M shares.
So when people say it's ALL manipulation and another poster claims there was NEVER ANY manipulation and it was only bad management, both are wrong. There is room for both things to be true. In other words, almost everyone has been at least partially correct. The truth in this story is a shade of grey, not black or white.
Since June especially the ADXS BOD and Management has only helped the shorts drive this into the ground even farther with the sudden dismissal of DOC and then the almost total communications black out since then. The big PowerPoint presentation by Tony came across as uninspiring and maybe even a little amateurish in my opinion.
Still disappointed with that number reported today. There was a lot of volume in the 2nd half of October, so since the short interest didn’t increase or decrease (much), that suggested real selling. So unfortunately the Fidelity information today makes sense in that regard. The PPS took a hit on 10/24 and closed at $3.185. So the PPS has been treading water at that level since then.
I doubt much additional short covering was done in November so far. Volume has been relatively light and is nothing like September and October. It may be that the shorts that wanted to cover have done so and now it’s a game of watch and wait to what ADXS can or can’t deliver.
Short interest might be at its lowest levels as a percentage of the float since June 15, 2015, which is slightly positive, but the percentage is still higher than what is ideal.
ADXS management is now under real pressure to deliver something tangible. I still believe the ADXS BOD owed more and better communications to their shareholders when they decided to terminate DOC and Lombardo owed shareholders better messaging when he was named as the replacement.
Unfortunately I wish I could say I had more confidence in Lombardo. I haven’t seen anything all that impressive so far, with his resume or the job he’s done these last 4 months, but I’m hoping that behind closed doors he’s a different person and capable enough to deliver what’s needed.
I continue to hold because I believe the salvage value of the platform is still $750M to $1.25B in a fire sale. I think the platform is worth a whole lot more to a company with the management and cash to run it correctly.
All I ask for comments like this is some context and some proof.
From June 30th until now, based on reporting available to us, short covering and institutional selling has matched up almost evenly (including the Adage sales).
Maybe the 4th Quarter reports when they finally get released will show a significant divergence.
Before you get too carried away, let's be clear that while I am disappointed that short interest did not go down more, it did go down.
And not to be ignored, short interest as a percentage of the float is now lowest since the June 15, 2015 report. So the percentage dropped farther from 2 weeks ago.
So it appears we are at a crossroads. We may need to see some significant development announced by ADXS before we can expect another large block of shorts to cover.
As to who I think will call it correctly. I think Adage and their confederates will call it correctly. Whatever they want, and when they want it, is what will happen. Which is exactly the same it's way it's been in ADXS since January 2015.
We'll see.
I'm glad short interest didn't go up, but very disappointed in the number. I was hoping for at least another 500K.
Sigh. Obviously I wasn't talking about a nickel. If you paid attention to what happened on the last short report date (10/24) you would have realized there was a high volume takedown that day of over 10%, one of the highest volume days in 3 months.
So far that doesn't appear to be happening today, but it's still early.
Before you start LOLing other posts, try to understand them first.
NASDAQ reporting schedule says today (11/9) after 4pm
Since short interest gets reported after the close today, I'm wondering if they try to knock the PPS down today before the report. We'll see.
I guess it depends if one believes posters here, some who spoke occasionally with DOC since 2013, are telling the truth when they said DOC was surprised by his dismissal in June.
My view is that I do believe them. DOC was given the option so many CEOs get when a decision has been made by the BOD to replace them, basically they get a chance to resign on their own, or be fired.