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BioRocks, thanks too for your contributions, realistic approach and optimistic attitude during some dark days. Best of luck with your trading and more. Flex
Thanks to all the great posts and support here in the over 3 years that I have held Ariad stock.
With that I appreciate so much the sharing of thoughts and possible outcomes from the many longs who went through hell and back. For sure there were many days of uncertainty and I applaud those who had the conviction and guts to ride it out as it wasn't easy and we all truly earned every cent gained.
I hope to see many of you on other boards and I can always be contacted at mytime45@gmail.com for those wanting stay in touch. Thanks again and with much appreciation.
Vid, BioRocks, Jess, Luma, and other many optimists (or pessimists) here Happy New Year….surely biotech is a risky sector to be in and many here have been in Ariad seemly for an eternity….some for 10+ years and some like myself since right after the 2013 crash. That said and for what it is worth below is how I see it:
1. The science drives everything and in all probability soon Ariad will be a two drug company who has (especially recently) demonstrated their ability to innovate, be open to new applications and be a player in their area of expertise. Sure it may be a crowded field of sorts yet they are and will get a lot of attention with the developments coming. I love the posts by Luma who has IMHO provided so much information about the applications and deep dives into what Ariad drugs are doing in both the lab and field. Thank you so much!!!
2. No one here knows the “value” of Ariad (present and future) as the changes in the day to day pps doesn’t really mean a lot. Like Jess, I hope that Denner doesn’t sell for anything other than max return to shareholders and would honor his (Denner’s) opinion and what he can get at the table. It’s all about risk/reward and Denner is a pro (I didn’t say infallible) when it comes to knowing biotech, M&A activity, what Ariad has and with a strategy to play his cards in order to win the hand and walk away with a large pot.
3. There are a lot of players in the mix for which no one on this board can with any degree of confidence define or predict outcomes. Yet we do know that institutions now own around 90% of the stock with probable accumulation still going on, hedge funds are in big time, professional management has signed on to an opportunity of a lifetime (PP & company with options) and also we also see the day traders, options holders, shorts (a lot of theories there) and the MM’s playing their games almost every single day.
4. Finally, I do not know a time frame when things will heat up and happen with regard to a BO by BP. For me, patience is the key and “continually” looking at the big picture, not being distracted or disillusioned by the day to day noise is my mantra for I am here to the end. Also I think that whether the BO happens in 1 month, 1 quarter, 1 year or more that we are in good hands and that the stars might line up to maximize a payday…whether that is $20, $25, $30 or more.
Thanks for listening and I hope that some here (IMHO many great contributions) might feel the same with added thoughts as well. Finally, I am glad that all here are now respected. IMHO
Tc, BioRocks, Jbog, Vid and many more here.....about the "shorts".
I have to admit that I have changed my tune a bit with thinking there will be a massive short squeeze coming down the pike. First of all, as we all here know, the shorts don't own shares but are borrowing them from "longs" and therefore need to cover at some point. Surely, as reported there are over 32M short at this point and in doing some simple math with regard to Float, shorts and institutional holdings (over 90%) there is no way that 32M can cover (buy long shares) without spiking the pps big time. I think that is what many here are looking at when anticipating a short squeeze (like myself heretofore).
That said, Jbog has brought up the fact that there are several more Bio Tech stocks similar to Ariad with about the same proportion of shorts and the shorts may just be sophisticated hedge and options mechanisms. With that, I too believe that the "shorts" are not there as a negative sentiment on Ariad but rather represent sophisticated areas of trading tactics, etc....outside of my realm of understanding as a retail investor. To tell you the truth, I don't know exactly how is is going to work with 32M "eventually" covering (maybe they won't cover until the pps is even a lot higher) and have a LOT of questions especially with all of the past "shakes" and "dip" initiated by the shorts in recent (last 3 years) Ariad history.
Bottom line, IMHO very, very good things will be happening in the first quarter but I am not so sure that a short squeeze is part of the equation. We have all had our hopes up before especially when the pps went over $11 and shorts even increased. So, I guess I am saying ...I don't know and don't have a prediction.
Vid, BioRocks, et al, for sure the smart money could care less about the current day-to-day pps as that will in no way affect the ultimate value when the BO happens.
With over 90% in institutional holdings and little volume right now, my only advice is "follow the money", keep the faith and be patient. For all of us here as long retail investors, this is a tough stock to own at times YET know that in the end it will be worth the wait.
Most of all, better days are ahead as Denner along with Ariad Management have created and executed according to a true strategic plan in maximizing shareholder value. Hold on and enjoy the ride after a long (absolutely longer for many here) rocky road with so many twists, turns, near disaster and enduring some really dark days.
To think that a year ago we were in the low $4's and now in the $12-$14 range, I am delighted along with ready to get off ONLY when Ariad gets to the intended destination.....a BO with BP. Until that time, GLTA and the best of the holidays.
BioRocks and Fan....With Denner's connections and M&A networking/experience, one can only deduct that at least conversations are taking place especially given the recent press about Ariad re: hedge fund activity/interest along with being ripe for M&A.
Also, the fact that Ariad is the number one holding in the Sarissa Hedge Fund portfolio gives further credence to the fact that he is conducting phone calls and perhaps meeting with BP's interested in doing a legitimate deal. In the deal making business, it never hurts to at least talk about it.
I would think that Denner has put a "number" out there (probably on the high side) to set the parameters which would be of interest to him. I guarantee you that number is NOT around where we are now with the pps.
BioRocks....You are so right that Denner's role right now is in a "leadership" role vs. operating the day-to-day business. Especially in the past 2-3 years, certainly he has put in a lot of hours and energy in reorganizing the highest levels of the organization and therefore has planted a lot of seeds. Further, I have no doubt that he is maximizing the use of his time no matter whether it's 2 hours a day or a week.
Finally, with a very high level of certainty he is and will be the focal point(and person that BP will or has contacted) to do the BO deal.
BioRocks, I think that is a very reasonable scenario and makes a lot of sense in Denner taking the risk off the table, making some good money, getting Ariad back to pre-2013 crash levels and moving on.
Certainly, it is in Denner's DNA to "hit and run" vs. become an ultra long term investor. Also, that level makes sense in giving the new management people the opportunity to cash in as well as it would be worth their time and career interruptions to be rewarded in less than a year of hard work.
It would be a "win-win" for everyone.
Vid, good advice to all here with a perspective that is needed during times when it might seem we are adrift with no direction.
You are so right with the amount of institutional shares being grabbed up and with a very low likelihood that they will be sold on the cheap and thus being accumulated and held for the bigger payday. Surely in time, supply and demand will kick in and the pps should rise as at least some covering will happen.
Count me in as being emotionally tied to Denner!!
Stiny, Perhaps the "weather systems" are all lining up for that "PERFECT STORM" and I agree that many factors are on our side to that end.
Unfortunately, as long as we all have risk on the table (namely owning shares of Ariad) we will have to endure the unknowns yet to come in our journey. To say the least "no pain, no gain" (the pain is in enduring so much outside of our control...other than selling and getting out which for me is not an option) and let's hope for the best possible outcome.
2da, surely you and many others here have been to hell and back and therefore you might look at Ariad with some warranted skepticism.
Many here (me included) value your knowledge and perspective with both the caution and at times contrary take on things.Thanks for your help in understanding Ariad with that depth and history.
I may not completely agree all of the time yet your posts help to keep the unguarded optimism under wraps which can be a good thing. GLTA
BioRocks, Jess, Purvida, MrPlmer, Vid and others who think we are on the right track....
Let's face it, we all here don't have all of the facts and will be in the dark until a BO happens and until that time we can only read the "tea leaves" as to accumulation by the smart money, development of and becoming a 2 drug company, and being in the hands of both operating professionals along with a master (aka Dr. Alex Denner) in the M&A arena.
Of course nothing is a straight line to where we want to be (no specific BO predictions) yet if one looks at where Ariad has been, where it is now along with the potential for an even better outlook then it appears that we are running on all cylinders.
Bottom line, things will get better and better and then it's just a matter of parties agreeing on value in this M&A rich atmosphere with more money from offshore that BP will have to play with and being even more risk tolerant with pressure by their BOD's and shareholders to grow and gain market share. Ariad, is an ideal, ready made way to achieve those goals. IMHO
Vid, thanks for your cogent post with a perspective that indeed sums up the big picture about Ariad. You are so right that the day to day ups and downs are "noise" and the key is keeping our eye on the "target" which is down the road.
As the pps has progressed upwards (albeit sometimes with two steps forward and one step back) since last year at this time, so many analysts have been so wrong with their "outlook". For sure, they play their cards close to the vest and will never go out on a limb publicly even though I am sure they have different private opinions.
For me the key is that we now have an ownership that is over 90% with institutions who really are the "smart money" and have a lot more knowledge than anyone other than Denner and the people he is talking with. As I have posted several times before "we are the minnows, following the sharks" and I for one will continue with that approach. With that, there are more sharks then ever before. IMHO
BioRocks, Like you I think much is going on behind the scenes with either explicit or subtle negotiations. Surely, the whole exercise is a VERY complex exercise with both the science and business aspects and also projecting risk vs. reward for the future. Similarly, I believe that we will see a BO prior to the Brig approval in the buyers goal to keep down the cost.
Of course, as you pointed out, Denner is in the drivers seat and a true "expert" in both evaluating and executing the deal. I trust his judgement and ability to maximize shareholder value in the end.
Jbog , FINALLY I "DO" see your point (see stats from the link below) with both the fact that BioTechs similar to Ariad's size have a very high % of Institutional Ownership ALONG with a high percentage of Short Interest.
Below is a link of a stock screener that I ran and may of be of interest to many here who have heretofore pointed out these aspects of Ariad (Institutions & Shorts).
http://www.finviz.com/screener.ashx?v=131&f=ind_biotechnology,sec_healthcare&o=-marketcap&r=21
If one looks under the columns "Inst Own" and "Float Short" you will see the stats on these two aspects which don't appear to be unusual for a BioTechs around Ariad in the sort (Market Cap). It is interesting to note that companies with more than a $4B Market Cap SEEM to have much less of a Short Interest. Perhaps as the pps rises the short interest will go down?
Thanks again Jbog for your insight and sharing this with us here
Yes, jbog very good post with logic and facts. Thanks
My only additional question is : Ariad has been highly shorted for a long time and even earlier this year when we were at $4..... So are you saying these are new shorts (now) and that the shorts earlier in the year covered and we didn't detect that? Just asking.
Jbog, do you know why or have a theory as to why Ariad is one of the most shorted stocks on Nasdaq? Or Do you discount that status as having any implications with the pps?
BioRocks, I agree with your likely scenario.
Do you or anyone else have a take on the 90% Institutional Ownership status?
Perhaps I missed something with whether this is due to some tax/trading tactic or if it is a "real" event. In any case, if indeed institutions own 90% of the float and assuming this is accumulated long investment shares (not trading day to day), that doesn't leave much leftover for others to trade and/or shorts to cover with?
Definitely, there are others here who might have a much better handle on the whole situation regarding both the huge institutional and short positions in relation to the impact on the day to day pps price action. My feeling is that both of these affect what we "see" for pure supply and demand and "street" sentiment doesn't really come into play as it would with other stocks. To me and all of the reported statistics (Nasdaq most shorted stocks, etc) both (institutions and shorts) are way out of proportion to what is normal. Any ideas or comments?
Institutional Ownership as reported here a couple of days ago has gone up considerably. See Nasdaq link below :
http://www.nasdaq.com/symbol/aria/institutional-holdings
To me that is a big development as verification that portends a bright future.
With this report and the short position essentially unchanged along with the float (Total of 194M - 14M (insiders, etc) = 180M), where in the world are 35M shorts going to find those shares to cover? When they do cover, I would think they are going to be very expensive.
With shorts at 35M and institutions at 167M and with a float of 180M how does the math on this stock make sense? I would love to know.
For us long term longs here, IMHO watching with expectations the day to day pps of Ariad is a futile exercise.
Sure, I would love to see the pps go up and up with confidence, certainty and predictability but that is never going to happen with hedges, shorts and other traders doing what they can do "SHORT TERM" to impact the price action. Their goals and motives are so very different from ours and thus we may watch with a negative reaction, disappointment and possibility even depression of sorts.
I continually too have to remind myself that I am here for the long term view, building of value and what most likely will result in a BO by BP whether (and this is debatable) soon or down the road. We can analyze all of the many factors affecting Ariad's overall value yet without much confidence that our predictions will be realized in a reliable stock market price in the short term days or months.
Further, I believe that the institutions and hedge fund who have accumulated and are sitting there with a high percentage of the total float could care less about the daily ups and downs and therefore are patiently waiting for payday at a much higher level.
Obviously, I want a maximized value in a reasonable amount of time (within 1 year) but most of all I do have confidence that we are in good hands with how the science, management and BO negotiations have and will be used and implemented by Denner and his team. I don't give him credit for everything regarding Ariad's present situation but certainly a comparison could be to that of a maestro leading an orchestra with many elements of expertise.
I do not think that a stock with an average daily volume of just over 7M and which is already at 6M with 3 hours to trade is a "tepid" response.
There are many factors that go into the pps just rising without resistance and it will take days, weeks and maybe even months for true supply and demand to take over. Ariad has a legacy that goes from the mid 20's down to the 2's and now back up to $14 and with that there remains some baggage (namely shorts that did not cover at lower levels), hedges and traders playing games.
Just remember that there are still 35M+ short shares still out there and continually fighting the pps to go down. At some point, no matter the tactics of shorts (now on the wrong side), hedging or other options play, there will be a consensus that the pps is going one way and that is UP.
Until that happens, we will continue to see the ups and downs (hopefully not significant) and price action that we are seeing today. IMHO, there is no way that 35M shorts are going to sit there and not cover when they put up the white flag. Even if it is "hedging" it would still be burning money.
Of course the good news (like today) with more to come will be steps in the right direction. Further, any news or indication of BO negotiations would be a spark that would ignite the rocket.
Until then, sit tight, be patient and see the games for what they are……and they are NOT about a sentiment that this should be a hugely shorted stock as it is right at the moment. The fundamentals of Ariad HAVE, ARE, an WILL change for the better and with that the value ever increasing.
BioRocks....so right with your analysis and an initial shake with the pps coming down from premarket. Most of all look at the huge volume in the first 30 minutes as shorts are fighting for their life to keep the pps down. And the day traders love this action with the volatility as well with no real incentive for the longs to come in right now...perhaps they are accumulating even more before we see the new highs. Complex to say the least but interesting and all "good".
This news is yet another "step" in the strategic plan to maximize shareholder value which is being executed by a team of professionals with a focus on a BO at an optimal level (risk vs reward) and led by Dr. Denner who has the experience, knowledge and negotiating skills to put it all together....science, management, strategy. We continue to improve our position of strength with better days ahead. IMHO
Vid, TC, Jess, BioRocks, et al, Count me in as thinking that Denner has been the one "catalyst" to guide Ariad from a very precarious position to now one of strength.
He made some really gutsy decisions and executed many difficult tasks (CEO, BOD, Management changes, partnerships, drug roll out, areas to focus) in a way that instills confidence.
And look at all of the "smart money" institutions and hedges that have followed him as he has lead the way. Yes, he has a lot to gain from his 12M shares (Sarissa) yet he has invested a lot of time and effort into turning Ariad around in creating a winner that IMHO is pure genius. As I have opined before, he is not perfect and I am sure that he could honestly point out things that he might have done differently as that the nature of doing things differently and making gains.
Vid , great posts about the Ariad sage and Denner who has created the dynamic management structure to incorporate ALL of the elements required to grow and get to a BO that will surely maximize shareholder value with an agenda that is focused and unambiguous.
No matter the debate, clearly Ariad would not be where is is today without his leadership and strategic plan along with "almost" flawless execution. No one is perfect but I think Denner and his team have created an enviirnonment that instills confidence which is essential for going forward And for me the proof is when things are not going to plan ( i.e. The pricing problem) and the ability to get back on track, not panic and continue to be focused.
If we are looking in the rear view mirror (which I for one don't find particularly productive) perhaps we should compare the 2.5 years after the 2013 Crash under HB-etc vs, October 2016 Pricing problem and compare where we got back to and how long it took.
My logic from my first investment in November 2013 was that it is a good company with a lot of potential and now as a minimum there is absolutely no reason why the pps should not return to the pre Crash level. It's amusing to read that some here don't even think that is possible with so many other positive developments with more to come. Let's all remember that BP is not buying a company for what it IS today but what it COULD BE tomorrow.
What is really exciting is that better days are ahead INDEED.
BioRocks, To say that I agree with you about Denner is an understatement.
Not only has he hung in there when he could have made a quick killing and moved on (which would not have bode well for the pre 2013 crash shareholders) but he has spent much of his time re-building Aria the hard way (of course with risk and imperfection) with a myriad of operating decisions, personnel moves, product enhancements and strategy to maximize shareholder value.
I don't have to remind everyone that the institutions (smart money) are in this big and Denner has given us a lot of clues as to his intentions of waiting for the right time to sell with the intention of making a lot of money for himself and his followers. That said, I am one of his followers. Thank you Dr. Denner during this time of Thanksgiving.
mrplmer, I agree completely and to me it is a "spitting contest" of sorts to contest the future of Ariad especially with the harshly limiting outlook. Logic to me says that with the additional products (since precrash 2013) one could "at least" expect the pps to get back to the low-mid 20's where it had been at that time. Now add two more or possibly more product developments ALONG with the new management who clearly are focusing on a BO (of course when the time is right) that will maximize shareholder value and we have even a higher level.
Thinking back even a couple of years, a prediction that we would be around a $14 pps (now) with Denner completely running the show, some really good logical strategic planning (partnering and doing what they have to do to maintain plenty of cash) and the outstanding product development would NOT have been forecast by many.
Most of all, we are dealing from a position of strength with a lot of positive news and developments yet to come. I don't give Denner all of the credit (and certainly he is not perfect) yet I look at him as the maestro leading the orchestra of many with talents and bringing it all together. That is exactly what is needed and thankfully what we have in place. A very Happy Thanksgiving to all with good luck. IMHO
Great post Vid and thanks for a the most realistic outcome at this point in time. The best days are surely ahead
jbog, Thanks , your post was extremely helpful and enlightening . Do you know if Ariad in particular has a a high percentage of shorts vs. float? Or is the level (s) typical? AgainI appreciate your input
jbog, Would you share with the rest of the board why you think that the shorts will escalate their position as the pps increases?
I am NOT disputing that contention (respect your knowledge) yet I would like to know why and what mechanics they use or see to get to that end. Logic to me says that as the pps goes up, the # of shorts would decrease. You seem to know a lot more about how it works in reality.
Thanks always for your important contributions here.
From an article yesterday in Investor's Business Daily
Biotechs spiked higher after Donald Trump's election. Trump is seen as less likely to tackle mounting drug prices and has proposed incentives for companies to bring more cash stateside. That could spark more M&As for small-cap biotechs.
jbog, Always interested in your take on the shorts.
That said, do you have a take on why (see my post 78691) the short level of Ariad is disproportional to the amount of the float by a lot with 36M and well over 20% of the float along with similar higher volume vs other stocks.
I think that 36M is a "force" that inherently goes against (by their very definition) the philosophical reason why longs are in the stock in the first place. Thus longs want the pps to go up vs. shorts wanting the pps to go down and thus are by their very nature opposed.
Doing simple math, if the pps overnight were to go up to $30 then ($18 x 36) would amount to a loss (or less value) in the amount of $648M for the shorts...yikes. My personal opinion is that 36M shares whether used as a hedge through options or NOT, have a HUGE vested interest for the pps NOT to go up. Even if used as a hedge, they would want to be out of their short position prior to an event like this. With that thought, I wonder why the short position has not appreciabley been reduced from the example you used $4-$14.
Thus that is why I wonder very much about why they (the shorts) are there at their current levels, what function they serve and most of all their ultimate disposition.
Like I have written before, I am very, very open to learning and want more knowledge to eliminate the mystery of elements that are not openly known or able to be discerned. So many here seem to be oriented to the "science" which is extremely valuable with all the inputs and outputs of that endeavor as it affects the value of Ariad. Similarly, I think that many also want the same approach to trading tactics and the cause and effect of the market value of Ariad at any given moment in time.
At least "I AM" big time as I am sure that like many here when we had the "DROP" a few weeks ago there was a lot of angst in just looking at our account sizes dramatically fall and within that "event" the shorts made a lot of money. IMHO with a sentiment of working together as a board.
Thanks Drgiggles, Always looking for better input. Do you have any idea why the float is down from previous data?
Drgiggles...thanks for looking. Where did you get this number? I am using numbers from Yahoo-Finance.
If it is 157.7M now would that mean that more insiders are in as Float is calculated by subtracting insiders/restricted shares from total outstanding?
jbog, BioRocks, Vid, Tiv, et al...interested in demystifying the understanding of the short situation with Ariad.
Last night I was reading the current edition of Barron's which every other issue (2 week interval) they published the most shorted stocks on NASDAQ.
http://www.barrons.com/public/page/short-interest-nasdaq.html
This week, Ariad moved from #28 to #22 most shorted stocks. Literally this is ranked by actual shares shorted for which there are 36M as we all know. Further, Microsoft is also on the list at #13
So here is my point and what blows my mind:
Ariad with a float of 174M, has Daily Average Volume of 9M, a short interest of 36M (aprox 4 days to cover) is ranked 22
AND
Microsoft (and there is no other way I am comparing Ariad to MSFT) has a float of 7.59 BILLION, has Daily Average Volume of 40.2 M, a short interest of 50M (aprox 1.7 days to cover) and is ranked 13.
I am not sure exactly what to make of this observation other than the short situation with Ariad for some reason is extremely high YET the volume with Ariad is also extremely high (relative to float) therefore making the time to cover (if shares are available at the right price) very low (4 days).
It should be noted that the companies ranked "number of days to cover" gets to #50 before the number of days goes below 30 (yes 30).
What I like about Ariad (especially after this short interest comparison) is it's volume and therefore liquidity. If we were stuck with a thinly traded stock there might be a LOT more reason to worry about the seemingly huge short interest compared to the float. Yet I have NO IDEA as to why the unbalanced short interest/volume even exists and that role in the pps volatility as well.
I am looking for feedback as I think this might be some of what is germane in looking at the shorts with less fear.
Tiv, Actually I agree with you YET do not disagree that Ariad will be sold for a pps much higher than many have thought possible due to their innovation and execution both as espoused by others here.
Like you, (and I do realize that hedging with derivatives can be complex to understand and discern) unless there is major covering going on (which it is not at this volume) the shorts are just not going to lay down and roll over. With that, I also realize that there is so much about the trading aspect involving hedge funds, options, etc that I do not understand and has perplexed me for years now.
As many know here, I am optimistic about the prospects of Ariad in time but there is a good possibility that history is repeating itself with the bait (pps higher) and switch (bear raid) tactics.
Unlike you, I am an investor (not a trader) and thus enduring both the ups and downs. That is my decision and we both will get to the same end albeit in different ways.
Thanks Jess, As someone who is limited with the science and of course very interested, I really appreciate those (who are many here) who post with valuable information which is at the "heart" at what drives the Ariad ship.
Vid, great post in covering some really good points about M&A along with the timing of any new BP limitations. I think that the powers at the BP,s interested in Ariad are going to move sooner than later if only due to inside knowledge that we don't know and/or consider along with taking it off the market with the possibility of it costing a lot more as time goes on. Also in a friendlier business environment it might be easier for BP executives to take more risk.
Perhaps others here know about tax implications as a catalyst in sweetening any deal? Obviously, there are a myriad of factors that could move the BO.