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Fair enough. We are all frustrated. As you know, I am deeply in the red as well, a fact I could accept if I had bet on the science and busted.
Tougher to accept the circumstances here and remain optimistic about CYDY management's ability to navigate these rough waters.
Bobby, so what is your plan? Serious question. I know you have a sizable position. Are you holding?
Great purchase! I would do the same, but the amount of additional capital it would take to meaningfully lower my average at this point is not an additional amount I am willing to risk on CYDY! Math is a pain in that way ...
I agree. If the past is any precedent, then I am not anticipating impactful new information.
Past calls have typically revealed some bad news/delays, together with some positive new information that has not been impactful to the SP.
I have many, many reasons to want to be wrong about those beliefs, but only financing will move the SP. I expect we'll hear about that first in a joint PR with the partner.
Great post Grip.
This checks out...
Understood, and my best to you as well misiu. Good luck to us all, and let's hope leronlimab is in the real world helping patients sooner rather than later.
Hey misiu, always good to see your posts.
I don't have much disagreement with Grip's post that you responded to. He may have stated "what science?" elsewhere, but, if so, I didn't see it.
In the post you replied to, Grip generally restates my belief in the strong science of leronlimab while questioning (as I do) CYDY management's ability to translate that strong science into shareholder value.
As Grip said, what good is science if it's sitting on the shelf? (like GVHD and mono HIV currently are due to lack of funds, and like mTNBC and cancer are as well to the extent the glacial pace of enrollment is attributable to lack of funds and limited trial sites)
[EDIT: Maraviroc finishes P2 trial in GVHD. Likely will make it to market, again, before leronlimab.
https://www.sciencedirect.com/science/article/pii/S1083879118306013]
I don't think many (or any?) here dispute the proven science of leronlimab in combo HIV, the (largely) proven science of leronlimab in mono HIV, or the potential of leronlimab in many other indications.
Howeber, I believe that all longs (and I am one) want to see a SP increase sooner rather than later after 3 years of declines.
My patience is wearing thin, because it's my belief (and others) that SP increase will take strong science + good management + good finances.
CYDY sorely lacks the last item, and it remains to be seen whether CYDY's management is up to the task of fixing the situation.
I am hopeful they are, but, the longer this goes on, the greater the doubt that I (and others) have that CYDY management is up to the task.
Most importantly, the longer the financing situation is unresolved, the greater the delay in leronlimab's science reaching and helping patients.
Good luck to you as always!
Thanks for the kind words Indexguy. Much appreciated. Always appreciate your thoughts as well.
I wouldn't be shocked if the "revenue" to CYDY from IncellDX purchasing lab grade leronlimab to be used in its business is just used to offset the lab fees charged by IncellDX for patient diagnosis in trials.
Money is fungible, so it's all good, but that's my guess as to what is going on on the ground.
Hey Evil, thanks for the reply.
I don't take "fair" into consideration here, and I urge you to consider that any potential suitor of CYDY is not pricing "fair" into their model for the purpose of making an offer.
Currently, the market says CYDY is $0.30/share. I happen to believe the market is wildly wrong and have 388,980 reasons to root for it to correct.
I also understand intimately the mathematics of calculating CYDY's potential value based on a discounted projected revenue model for the multiple potential indications.
Most importantly, however, I understand that no one is willing to pay more for something than they have to and that CYDY's management has led the company down a path that has resulted in it having absolutely no leverage to negotiate a better deal than someone is willing to offer.
I've also stated in earlier posts that:
(1) I don't expect anyone would pay CYDY a "fair" price (which I'll define as the discounted projected revenue valuation model) until the market cap approaches something like 1/3 of that number; and
(2) It's on CYDY management to close the gap between market cap valuation and projected revenue valuation, and I don't have confidence they can.
It's for those reasons why, in response to a hypothetical question about $2.5B, I said I would gladly take $3.57/share today.
Reasonable people can differ. GLTU.
Thanks for the follow-up. I had about 50M in mind as the number for the convertible note reserve, but I forgot about the preferred stock.
Short version, expect the ask for an increase in A/S sooner than later.
With only 50M shares to play with, that equates to about $7.5M they can raise (at $0.30 with full warrant coverage).
Thanks for sharing Bobby. So 580,418,763 fully-diluted right now.
I wonder what is the current number of shares required to be reserved by the convertible notes? It has to be 50M+ and increasing as the SP decreases.
The math really quickly starts to dictate that we'll see either a deal or a request to increase A/S in the next few months.
Just to be clear for everyone $2.5B, using fully-diluted 700M shares just for the sake of argument, is something like $3.57/share.
This is a 1200% return from current levels and a 700% return over my average of $0.50.
People can disagree all day long about what the value of CYDY should be, or may be one day if everything breaks right, but, for now, the value is $0.30.
I take $3.57 a share all day long and count my lucky stars.
That's not to say that I don't believe, as a theoretical matter, that CYDY could be worth much, much more if all breaks right.
I just strongly value the 1200% bird in the hand!
Interesting. Thank you for sharing.
I suspect that a good portion of the shareholder base won't care what the explanation is if the stock is still trading where it is in the next few months!
For now, I will give them the benefit of the doubt, since they have information we are not privy to. Good luck to us all, and thanks again for sharing.
Thanks PNW. I know you've been around the block too, but I wanted to put my thoughts down both for those who haven't and because it's just ... cathartic.
Good luck to us all indeed!
I think it's pretty clear how CYDY got where it is today, but it's less clear to me, taking all of the history as a given, what to do about it now.
Call it a series of unfortunate events, but management decisions over the past 5 years regarding financing/uplisting/deal-making, self-inflicted wounds (e.g., whatever it was that happened with Pestell), and additional FDA requests (e.g., 700 mg data) have resulted in CYDY possessing a drug with huge market potential while trading on the OTC at $0.30 with next to no cash in the bank.
Tracing the history, it's easy to understand where CYDY is today. And, since no one pays more for anything than they have to (the buyouts referenced today had 100-200% premiums over current SP) AND CYDY has no leverage, it's also pretty easy to understand why no BO for CYDY will happen, if at all, until the SP organically approaches a place where a BO premium might come closer to truly valuing the potential here.
[EDIT: I know some believe NP has a role in the fact that no deals have occurred to date. Maybe, maybe not. My point in the above paragraph was to point out that simple math can explain why no deal for CYDY has happened. The company is valued too low and worth too much! If the chasm between the two was great enough, no deal. What you can say, I think, is that NP, as CEO, bears some responsibility for the former issue (valued too low)]
It's also easy to imagine that CYDY's potential partner in "the deal" could be stringing the company along, waiting for a chance to negotiate better terms given the leverage imbalance. Not saying I believe or hope that is happening, just that it's easy, as a theoretical matter, to spot the possibility.
What to do about it now? I have no idea.
Uplisting requires cash, and a lot of it, and CYDY can't raise it on terms that any of us would like.
Taking a drug to market requires cash, and a lot of it. Again, CYDY can't raise it on terms any of us would like.
Which leaves small raises to keep the lights on while a deal is (hopefully) finalized.
So I think there's an argument that, taking all of the history as a given, CYDY management is employing something like an optimal strategy at the moment GIVEN the company's current options.
With that said, I think most of the frustration with CYDY management has less to do with strategy NOW than with strategy over the last 3-5 years that has led the company to where it is NOW.
As two quick points of frustration, I will never understand the great R/S debacle of 2018 (not arguing for or against, just how it was handled), and I will never understand sending a blast e-mail to shareholders asking for money. Both of those decisions tanked the SP for no apparent gain whatsoever.
I remain hopeful that CYDY management can pull off the current plan (i.e., the deal). I would be as happy as any shareholder!
Like Saltz and others, however, I remain skeptical and VERY worried about what it looks like if no deal comes to pass. Anyone have the stomach for $0.25 raises with full warrant coverage? $0.20? That is what the alternative looks like.
Best of luck to all of us. Hoping to close 2019 strong.
Happy to contribute where I can. And that's how I view those suits as well. Nuclear option. Very apt description.
Grip, I'm not a litigator and have no knowledge about DE law regarding shareholder derivative actions (i.e., suits by shareholders on behalf of the corporation against, usually, a corporate insider).
I'm not sure one of those actions would be possible here, and, on a personal note as an investor, I don't think it would be prudent or appropriate.
However, for the sake of argument, assuming one of those suits was filed and allowed to go forward, perhaps some of those items (deals, etc.) would be discoverable if relevant to the claims at issue.
Like you, I am much more interested in reading CYDY's eventual answer to the remaining claims filed by Dr. Pestell.
https://endpts.com/jj-fronts-750m-cash-to-grab-a-failed-cancer-drug-thats-been-repurposed-as-a-powerful-anti-inflammatory/
add this one to the list as well.
A common thread with all three deals is that the companies traded on NASDAQ and were not living hand-to-mouth with $400K raises.
Good post. In response to goldenisla's original question, which was, essentially, when to buy more shares, I thought I'd share my thoughts. I've been thinking about that question lately as well.
My last large (and ill-timed) purchase was in September 2019 at .44. That turned out to be ... not the best. I have been burned too many times with the logic "surely CYDY is about to turn the corner".
At this point, I have decided to conserve my resources and wait and see what the SP does when (and I do believe it's when, not if) both the BLA is in and the HIV deal is signed.
I am not convinced that the SP will move significantly even if BOTH of those events occur in the near term. For example, I could see the SP still sitting at $0.50, which is around my current average. If I'm wrong about that and the SP shoots much higher, all the better. I have enough exposure to do very well and be quite happy.
However, if the SP still sat at $0.50 or so after BLA and deal, then I would consider adding even more to my position at those prices, as I would believe that CYDY was finally de-risked from both a science standpoint (in combo HIV) and financial/execution standpoint (by virtue of the deal for distribution).
Just my two cents. It has been REALLY hard not to buy at these levels, but I could only "catch a falling knife" so many times ...
Good luck to you.
Stalled due to finances
This is a great post Grip.
A friend of mine saw Sheen, and that's how I found my way here. We got in at about the same time (initial purchases in the .70s), and I believe our investment frustration/fatigue set in at the same time as well.
At this point, my position is larger, but my average is higher (.505). I went in in a big way (foolish, in hindsight) after researching CCR5 extensively and when Pestell came on board with the promise of cancer results in early 2019 (can you imagine where we'd be if CYDY had delivered on that).
If I'm being honest, I'd probably trade places right now (smaller position, lower average)!
I absolutely don't want CYDY to fail either, and I do generally think CYDY management is working hard (if not always smart) and trying to do right by shareholders (if not always succeeding).
However, for the last year I've felt that this company is analogous to a high performance sports car being driven by an inexperienced driver with no gas money.
At this point, unless we see SP appreciation in the near term, I either want the inexperienced driver to: (a) learn to drive like Mario Andretti and have the cash to fill the tank; or (b) move over to the passenger seat and let Mario Andretti drive, which would attract "race sponsors" to fill the tank, to extend the analogy.
My patience has been severely tested. I am not as down on NP personally as you appear to be, but I am ready to see consistent execution from NP and ALL company management and a positive return on this investment.
It's far past time for the drumbeat of positive science news to translate into increased shareholder value.
Here's hoping CYDY closes 2019 strong and both of our positions are back in the green by 2020.
Good luck to you as always.
Not sure exactly what you're referring to, but I'll be the first to admit that anyone who called a low of .26 was very right and I was very wrong. I knew it was mathematically possible but expected better execution.
Interesting. If true, hopefully the call is aligned with a meaningful update on the BLA or "the deal", but I am expecting the same old song and dance.
Thanks for your thoughts. I don't have any perspective on the issue, so I appreciate you adding yours. I still feel OK about things long-term, but, as you pointed out yesterday, I just wish I had waited until the SP was (more) destroyed to add the bulk of my position.
Good luck as always.
Saltz, a while back you posted that Eastwood, the new CFO, "gets it".
Do you have any hope that Eastwood can begin to right the ship financially?
Looking for any ray of sunshine in the otherwise interminable downpour.
Thanks in advance for your reply.
The most interesting thing about this filing....
As of 8/15/2019, there were only 7,294 beneficial owners (i.e., real people or entities, not stock held in street name) of CYDY.
Think about that. 7,294 people own this stock.
https://backend.otcmarkets.com/otcapi/company/financial-report/229214/content
390K here and part of an investor group holding around 1M.
December needs to play out. IMO, BLA or deal ... fine.
Neither, not fine and there needs to be a reckoning.
If they have a call before announcing a deal or BLA completion, watch out!! Folks are getting understandably restless...
I agree that if neither of these things happen in 2019 there needs to be a reckoning.
Hope everyone had a nice Thanksgiving.
This year, among other things, I am thankful at least that the latter portion of my prediction from early last month (i.e., a deal or SP in teens by Thanksgiving) did not come true.
I am shocked and surprised that the SP continues to hold up for now in the absence of deal news.
Good luck to us all in the coming weeks. As tax-loss season approaches, I think we will need it if the current news vacuum continues and the SP stays mired in the current slump.
No clue there. All I was pointing out was a correction that NP did not promise the deal in "days, not weeks". He promised NASH news, which we got today.
No clue if or when we see a deal. But NP has said, recently, that it is still in the works.
Time will tell.
NP said "days, not weeks" in reference to the NASH data being available for disclosure to a potential partner and, perhaps, shareholders.
Haha, unfortunately you've got it about right Grip. Experience tells me that none of these PRs (which are good news in a vaccuum) will move the SP sustainably.
As I've said before, if The Onion wrote CYDY PR headlines, it might say something like "CYDY cures cancer, is still broke".
Didn't take it that way at all - no worries! Just wanted to clarify for the board. GLTU.
wolfy, I got my info from the "Important Dates" section here: https://www.croiconference.org/abstract-guidelines.
It doesn't say WHEN the info is released (could be 5:00 PM PT, for all we know). Sounds like from NP we'll know tomorrow.
It's a pain to log on, especially by phone.