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Agree with your synopsis, although I think their institutional holdings are still 30%+ even after the Karst sale. Not bad for a small Aussie biotech. But the people who want to own it outside the US already do. Some don't like the redomicile and have sold or are selling. New buyers in the US will wait until after the event. The overall market outlook isn't helping either. We're sort of in a Mexican standoff at the moment. Still very positive longer term. My 2 cents.
Pick, if memory serves June 22nd it gets finalised and starts trading the 23rd per the initial announcement. Provided the vote is yes, which I believe is a foregone conclusion. Aussie retail doesn't appear to like it, but they really don't make much difference at this point.
Keepsmilin, a fee for BNY transferring old shares into new shares was mentioned in the first announcement. Assume it will be 2 cents per share, same as annual fee. Be nice not to pay several thousand for the privilege once it's done. Guess Aussie's will have to pay the annual now
Retail investors on Hot Copper are saying they are getting phone calls from Avita reps encouraging them to vote for redomicile. Any of you RCEL holders getting calls. I haven't. Just wondering, sounds unlikely to me, but I'm not Australian.
Oh, and while Aussie retail sells Americans continue to buy. See latest from BNY Mellon.
At this stage of the game a rise in #1 shouldn't surprise anyone. I'm sure you've taking in extenuating circumstances that are impacting the entire planet in regards to #2 & #3. No rose colored glasses, not expecting much for the next quarter or so. Positioned accordingly. Doesn't change my long term view. Avita isn't living in a bubble.
Evidently mant Australian retail investors believe that a small cap biotech company with a recently approved product should have declining sales and marketing expenses soon after launch. Why they believe this is beyond my meager intellect. Avita's burn rate is lower than many small cap biotechs I've followed, most of which don't even have an approved product. I do believe Covid19 has pushed back timelines, but that's true for at least 90% of business. Like the rest of the market it's going to bounce around for awhile. Shouldn't be news to anyone at this point.
I tend to focus on the big picture long run, but you are correct, in this environment having cash on hand is prudent. My guess would be this stock will be dead money for the next 2-3 months and float between about a two dollar range. But anyone who tells you they know what's going to happen in the short term in this environment needs to pass the joint. Better financial minds they mine are all over the place right now.
I'd point out there have been NO change of substantial holder notices (other than Vanguard who was accumulating a 5+% position) throughout this slide. That means none of Avita's major shareholders have been selling. For a foreign listed small cap biotech they have a very substantial institutional and insider holding. Despite what the blokes on Hot Copper think, this is the right move for Avita. Sales, production and workforce all in US, a market that dwarfs Australia. Think most of the selling this past week was retail in Aussie land.
Thanks for sharing that.
Problem solved:
Post by CaptainANZAC on Hot Copper explains the mechanics:
There is a lot of incorrect commentary on what this means but that is not surprising since dual listings are not that common, and poorly understood.
Here is the crux of it: it is not a 1:5 reverse split. It is a 1:100 reverse split. Shares outstanding will reduce from 2.1 billion (yikes) to 21 million which is pretty much what you see on NASDAQ for company's at this stage. CDI's on ASX will trade at ratio of 5 CDIs to every 1 share of common stock traded on NASDAQ. So, what does this mean?
For ASX holders you have to get the number of shares you hold (say 5,000) then divide that by 100 (for the reverse split (to give you 50 shares of common stock)) then multiple that by 5 (for the 5:1 ASX to NASDAQ ratio mentioned above) such that you will now own 250 CDIs. In other words, when you divide your holding by 100 and then multiple 5 it is mathematically the same as dividing your initial holding by 20!
For NASDAQ holders you get your ADR holding (say 250) and multiply it by 20 (to get you back to the number of ordinary shares you hold given ADR's presently trade on the basis of 20 ordinary shares for 1 share of common stock) to get to 5,000 ordinary shares and then I divide that number by 100 (being the reverse split) to get to 50 shares of common stock which is what I will have on NASDAQ afterwards. In other words, multipling my current ADR holding by 20 and then dividing by 100 is mathematically the same as dividing my ADR holding by 5 to get to my future common stock holding on NASDAQ.
Secondly, trading is completely unchanged (other than the reverse split). The only difference is that you will need to cast your votes at shareholders meeting via CHESS Nominees exactly like many shareholders who hold through nominees or custodians like NAB or HSBC do today.
Lastly, here is ECONOMICS 101: value is independent of capital structure. Google it. So the run off today is a lot of idiot day traders. As for indexing issues... come on ... do we Australians think the indexes are bigger and more numerous here in OZ versus the world's largest capital market. Can anyone spell parochialism?
Should be "scalds" not "scales". Why are they called smart phones?
Ditto Ctrx. I like the proactivity of management. The 3 equity raises they've done in the past year and a half have all been well used to propel the company forward. The first bought the production facility which lowered costs and raises margins. Second got an experienced sales and marketing team up and running shortly after approval. The 3rd was done in a friendly climate at a good price and oversubscribed. Thanks to that they are well capitalized. I believe the wound trials are likely progressing but due to Covid19 the vitiglo trials are probably on hold. Wish BARDA would get off it's butt on the pediatric burns as there are likely more scales with everyone staying at home.
Agree with you on negative posts, they can make you stop and dig a little deeper, occasionally they even have a point. Unfortunately the current basher, who does fly bys occasionally, tends to take real data out of context and turn it into something it isn't. But that seems to be a fad in the social media age. Once I figure out a poster is full of carp I just don't bother opening their posts.
John, think it's more the mechanics that are in question, not the ultimate result.
Based on the fairly confusing language in the release, my best guess, in order to get that proportionality, US traded shares will trade at five times the price of the Australian CDI's when trading begins after the reorganization. Whatever, they'll get it right in the end.
Not going to get into the weeds with you, but you're simply wrong on the facts, as you have been in the past.
StLXer, you obviously failed math and reading. The 200mm shares you are talking about is the maximum number of RCEL ADR's BNY is allowed to issue, not the number of shares after reorganization. The final new RCEL shares available will be 1/100th of the existing ordinary shares, or a little over 20mm. They aren't going to burn anything in the process. Not sure how many ordinary shelf shares there are currently but assume those will also convert at 1 to 100.
Scratch that 4-1 ADR reverse split, doesn't work either. Suffice it to say I can't make the math work as laud out in the announcement.
Hez,I agree with your confusion. As written ordinary shareholders (AVH) are made whole by the 20-1 reverse split while ADR holders (RCEL) would only receive 25% of their stock value. Obviously not what's going to happen. In order to make this work as written they'd have to do a 4-1 reverse split for ADR holders only prior to the reorganization. Hopefully their will be a clarification on this language. I'm sure they'll ultimately get it right. Just glad they're moving to an American exchange for real.
MONYMAN, I'll 2nd that. Good post, got to know what you own.
Two points.
If the Vanguard purchases were due strictly to index funds they would have been buying last summer and fall when Avita was added to the S&P ASX300 and again when they were added to the S&P ASX200. Was not the case.
Secondly, the BNY Mellon shares are a regular addition (or at times subtraction) from the AVH depository shares they hold to back the RCEL shares for the US market. BNY merely holds the ordinary shares for which individual owners like you and me pay an annual fee ($.02/sh in 2019). This addition would indicate increased demand in the US market.
Artful, first question would be how long before you intend to use the money in the Roth? How much tax will you owe after conversion? If we're talking about a significant amount of funds I'd really seek the advice of a tax/retirement professional, be well worth the fee.
Since psoriasis is an immune system disorder that comes and goes I wouldn't think treating cosmetically would really be an option. But might be something they look at in conjunction with gene therapy.
CALZF on US OTC, PNV on ASX.
Agree with you on buyout, think mid 20's to low 30's depending on when. Japan will be a nice addition to income stream, but we'll be receiving royalties there and uptake will be gradual. But successful use in Japan may encourage off label use elsewhere prior to FDA approvals, which won't happen until 2022 earliest.
Perry's mention of talks with "someone" on cosmetic use I still find very interesting. Hopefully we'll be hearing more on that soon. That market isn't in anyone's projections to date.
Think the next 12-18 months will have it's ups and downs, gradually continuing upward. Should make Mike and Watch happy. Over 90% of my shares are in a cash account, so no trading for me except for the few I have in tax sheltered accounts.
Good to hear from you tdeck, hope you're doing well.
Assume you are trading in a tax sheltered account.
Or he could be full of carp. But who really cares?
They also said most of the sales activity came late in the quarter, so it's possible not all the sales were booked as revenue until the current quarter. Sent them an email for clarification, no response to date.
And burn victims will need treatment regardless.
Thanks doc. In that case I'd have to agree with keepsmiling, sounds like Epicel.
Actually there was, the post stated they were using a spray on solution made of skin cells.
Epicel isn't a spray on product. And having reread the earlier post doesn't sound like Xcel either. Sure sounds like Recell.
Is that medical center associated with a University? If so I know of another spray/powder application which my oral surgeon here in Houston mentioned. But it's only available to medical research personnel. The company that holds the rights to it haven't pursued FDA approval to date.
Went back and checked, last year's half year audited report was released on 02/28/19, so end of February.
Perhaps one of the Aussie's will correct me but unlike audited quarterly reports in the US, Australian companies are only required to do audited reports bi-annually. This is one of the 2, but they have 2 months from end of quarter to file. So the audited version will have all that information.
After hours just closed at $9.00, love to be proven wrong. We'll see.
Was down in US after hours at first, but currently up a squinch.
Sales number was disappointing, no growth Q over Q. Looks like the Avita party may be on hold for awhile. Still like their long term outlook but don't doubt it will be down on the news and be treading water for awhile.
Volume finished strong today but it's worth noting most of the volume came after the stock bottomed out. Good luck to all (well most at least) with earnings.
This entire move, up and down has been on low to average volume, both here and in Australia. Looks like retail profit taking to me. The Redmile sales started over a month ago, larger trades early. If there aren't any new 13G filings in the next few days we'll know it wasn't institutional. I care a great deal more about tonight's results than I do about day to day trading. Until there's something to indicate the story has changed I'll be holding my shares. The rest is noise as far as I'm concerned.
By the way, study after study shows that market timers (aka traders) underperform the market. Doesn't mean there aren't times when a trade is a good idea, say when a stock goes up a lot over a short period for no apparent reason, or a good company gets hit because it's sector is getting clobbered. But trading requires multiple decisions to be made, when to sell, when to buy back, what are the tax consequences to possible profit. If I sell my long term shares today and pay the 20% tax and buy back lower will my now short term shares be taxed at a 37% rate if the company gets bought out. Takes a lot of attention, a lot of work and a LOT of psychic energy. Been there done that, not for me.
And a few gamblers manage to make a living gambling.