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8/4/2017 close: 6.54
8/11/2017 close: 6.26 (-4.6%)
Good for the people who bought yesterday afternoon, I guess. Care to make a prediction for the other 99.9% of us?
Understood, Gantor. However, I argue that we are not actually like pimples on an elephant's rear end and it only seems that way because we lack organization. Advaxis is still quite significantly retail-owned, with that ownership steadily increasing in recent history. This board with 300 followers encompasses the most vocal sample of that retail ownership. The various views shared on this board are still likely representative of much larger subsets of Advaxis's retail shareholder base -- they just don't say anything. Like I said, this form of extrapolation based on a sample is a common occurrence in business and politics and serves as the bedrock of concepts like polling.
Absolutely, that could work. However, it didn't seem likely that anyone would be interested in signing some new alias's random petition, judging by some of the hope-filled rhetoric that flies around in here. Especially if the message in that petition was written unilaterally and doesn't take interested parties' concerns fully into account. It would look like some kind of convoluted short ploy and wouldn't be taken seriously.
It seemed easier to try and insert myself into the community and work from the inside instead. Surely there are people who feel the same way as I do even if they don't post, and maybe by providing a thorough opposing view, some others could open their eyes and be interested in joining. The resistance I've met is not surprising, hence why it doesn't bother me.
Then there's the issue of simply not wanting to tell anyone who I am. I'm sure others feel the same way when it comes to something like a petition. A petition, or any kind of movement whatsoever, isn't something I've ever done before.
Given all the above, do you (or anyone else, feel free to jump in) know of any way this can be done anonymously (at least from each other) and with the highest impact?
It's not "some reason", it's common sense and also common in many forms of business and politics, though I don't know it by name. A single complaint can be extrapolated to encompass some silent percentage of the overall population which feels the same way. An avalanche of complaints is more indicative of deeply rooted unrest across a correspondingly larger base. It's much more likely to elicit a response.
As for why I'm doing it here,
https://en.wikipedia.org/wiki/ADVFN
Not yet. If I contact them alone I fully expect to get the same canned response. If a few dozen contact them in the same short period with the same questions, they'll know something is up.
I suppose I could just make a bunch of throwaway email addresses or something. Seems like a good way to shoot myself in the foot by accident if I suddenly have to maintain 20 conversations at once, though.
It's a good idea to always be skeptical of everything. Also a good idea to know when/how to turn it off otherwise you'll be no fun at parties.
My get-go from your perspective is just a few weeks ago when I stopped lurking and started moaning and groaning to try and drum up an outcry that reaches the company's ears. The get-go was 2 years for me.
I'm not getting out because that wasn't my investment strategy when I bought in and I took this possibility into account. Not a happy thing to see, but it is what it is.
Are you starting to come around? :)
It'd take about 20 years just to offset the tax losses. I went in knowing this money could disappear so I'm going down with the ship if worst comes to worst.
Thanks Gantor, spot on.
I want to add a bit (OK, a lot) of "fiction" to the motivation Adage might have to do this. All of the following assumes Adage is the short entity.
Consider it from their perspective. They're approached by a young, broke biotech with some, but not a lot of, data in hand. They're understandably skeptical but there's some data and it seems OK and there could be something there -- and thus money to be made. They're in the business of making money.
Of course, there is money to be made on both the long and short sides, but the short side is the cheaper method of guaranteeing that profit provided there is little buying resistance. There's also less risk of them being dragged into the price crushing that's typical of biotech stocks if they're the ones doing it.
During negotiations, Adage is understandably interested in derisking and guaranteeing a return on their investment -- the theory's expectation is that they are interested in this guarantee at any means possible, so they ask for a bit of "compliance" in certain things from the company in exchange for their capital. The company agrees, because the only other option is to shut down.
At the same time, Adage starts building a short position to hedge their long investment as well as to seek out those higher profits (360K was added to the short interest that December, bringing the total to 780K or 185% of the previous month's amount). They do this at the same time that word is getting out about their purchase, which spurs interest and buying pressure due to their reputation.
By January 2015 they're off to the races. Short interest increased throughout 780K to 1.65M, or 211% of the December ending amount. In late January, the Pearson hit piece is released. I can't quite seem to make this piece fit into the strategy, but it occurs at such an odd time that there could have been a motivation I can't see. It could have been an actual attempt by an unrelated party to initiate price crushing, or Adage wanted the run to briefly pause for some reason. The short interest by the end of Feb 2015 is 2.15M, or 130% of the January ending amount. The short interest at the end of February is 511% of the amount it was at the end of November, just 3 months before.
The run collapses after the hit piece. Adage buys another small amount, which adds more fuel to the run during March. By March end, the short position is 3.33M (154% of February-end and 785% of November-end).
The price collapses again the last week of April 2015 with a shelf offering. The third purchase is initiated by Adage, igniting yet another run during May.
By this point it's becoming pretty expensive to buy a significant number of shares. At the same time the short side strategy is starting to look pretty good due to the rapid increase in price. By the end of May, the short position is 3.46M, whereas Adage's long holding is 5.64M. It's likely that their risks are largely cancelled out around this point because they have substantial positions on both sides.
Now, they don't need to care whether the company succeeds or not; they just need to play the winning side. Summer 2015 hits, and we can assume the patient death became known to them early, leading to a rapid pickup in short interest since it meshes well with the initial strategy as well as looks like the winning side.
Then, the "best ever P2" results are released in September 2015, on September 17th. Could the release of this news have been the broken promise? It caused a surge in price which was followed by the inexplicable flash crash. The volume that day was 6M, and the short interest for the second half of September surged by 21% from 7.9M to 9.6M. Someone tried desperately to put the kibosh on that price surge and likely did it by shorting the hell out of it.
Cue a lot of short share recycling for profit along the way, and here we are still at 10M. One of the fascinating things I see in the short interest data is that throughout the worst of the 2016 biotech bear market, there was actually a large DECREASE in short interest, 9.28M December 2015 end versus 7.58M April 2016 end, even as XBI dropped from about 70 to 55 in the same timeframe. But all of those short shares came right back a few months later right after the Amgen deal -- none extra, none fewer.
It's been a few years now since the initial discussion between Adage and the company, and with much more data in hand, the company looks much more positioned to succeed than it did back then. Now it might be worth investing substantially more on the long side once the short side profits are taken. Those profits, which were generated from thin air, could then be used to lower the perceived cost to acquire the company by reinvesting them into the purchase offer, riding out the phase 3 trials, then flipping the company to a BP for several billion. And all of this at almost no risk to Adage, since their risks were largely cancelled out during the summer of 2015.
That time period provided an accelerant, but look back further and you'll see that the short interest was already on that trajectory starting with a near doubling of the short interest during December 2014 -- same time Adage bought in. Before that, the short interest was flat for a long time.
If you ask me based on Adage's buy timings, seems more like they were trying to push the price up to draw interest and buyers during the bull run all the while building up the current short position. Makes sense, it acts as a hedge against the long bet and probably provides more profit since buying up stock becomes more expensive more quickly than shorting it when you know you have full control.
Thanks mort, I saw that but thought it concerned only their second/third purchase. There's a link that goes to the PR on the Advaxis website.
http://ir.advaxis.com/press-releases/detail/934/advaxis-completes-17-million-financing
Unsurprisingly, dated December 2014 -- same time short interest started picking up. Chalk up another "coincidence", I guess.
So someone like Adage?
It's not chump change, and don't forget to take into account the recycling. $100M profit is the absolute floor with a short-and-hold strategy.
Remember that this thing swings several percent per day. Multiply that across several years and you're talking about a lot of saved up bank.
I maintain that we don't know for sure whether Dan's hands were tied and this was, in fact, the doing of the board. As I've said before it's also possible that there was some straw that broke the camel's back and caused Dan to leave out of extreme moral/ethical concern rather than that he was let go.
If this was the case, then we're not out of the clear. Whatever it was, the short position was set up with gusto throughout the entirety of the bull run, and stopped just as suddenly. Too much coincidence, I think.
My overall point is that as the price continues drifting lower and the short side profit continues increasing, don't be surprised if we see that profit serve as the backbone of the offer that takes the company private.
I want to color the analysis with Adage's moves for context, but the information is surprisingly hard to find.
Anyone know when exactly Adage first bought in? Seems hard to find unless I dig through all the documents, blech.
I'm running some monthly numbers since short interest started picking up in December 2014. No, I'm not an analyst (at least not a financial one), yes I have a job, no it isn't a financial analyst, and yes I do have a lot of spare time in that job sometimes, like today.
Sources:
https://www.gurufocus.com/ownership/ADXS (short interest history)
http://www.nasdaq.com/symbol/adxs/historical (historical prices)
Interesting stuff.
A) Taking a nonsense assumption that the short position is not being recycled,
B) per-month VWAP, and
C) per-month short interest changes
the cost basis of the existing 9.97M short position is, at maximum, somewhere in the neighborhood of about $154M. Subtract $50M if the plan is to cover at or around $5, for a minimum profit of just over $100M. Note this is ignorant of the fact that the short position is almost definitely being recycled; it can be assumed to increase that profit by an unknown but probably significant amount.
The short interest as a raw count of shares surged extremely rapidly throughout all of early-mid 2015, particularly June-September, and topped out in Oct 2015 coinciding with the clinical hold. It has since remained amazingly flat when plotted. I find it interesting that it never increased much afterward or even during the second half of the hold, I would have expected it to if there was serious doubt and not foul play.
If anyone wants me to try and dig anything else out now that I've put the work in to join together some disconnected data sets, let me know and I'll see what I can do. No, I won't show my work because I'm not 100% sure what kind of identifying information might show up in file headers. If you want any snips of anything for supporting evidence I can upload to imgur or something and provide a link.
Maybe a biased perspective on my part since I'm too lazy to corroborate this, but there's been a somewhat consistent pattern recently of ADXS outperforming the indices when the indices are red. We both see it as covering, but where we may differ in opinion is I've come only to see it as covering against downward pressure with the intent of shorting those same shares down again from a higher point against buying pressure when the indices are green. Of course that buying pressure is weak as hell because the company isn't helping, and so we start another leg down to $5.
ValuEngine is one, another one going by the silly name of BidaskClub also issued a sell recommendation a few days back. A Google search for News using "adxs sell" will turn it up. Both names sound like scammy unknown garbage to me so I'm guessing they're the pawns of our short friends.
Interesting edit, changing "trading" to "ADXS". I mostly agree with the edit -- ADXS may be above $30 before the year is over, but I don't think by much and I doubt it will be trading.
Indeed, this is the right conclusion to draw and is also why I'm still holding instead of selling. I added about 10% to my ADXSW count a few weeks back while the common shares were around 6.20-6.30 but that's absolutely all I'm willing to do for the foreseeable future until we get some clarity. What a joke.
I don't expect we'll see much running hard in the other direction though. I expect current shareholders will be brought an offer for relative pennies, which they will accept since spirits are being broken down hard currently. Then the company will be taken private and the true spoils will be forever out of our reach.
Anyone paying attention to the various sell recommendations that have been popping out the last few days?
Can't go too far over 10M short -- need to instigate some selling to get to $5. Provides some good cover too. Bunch of smart opportunists over there.
Plenty of folks have "vision", and what they see with that vision is their money flying away.
That's not to say the situation can't change, but people have good reason to be pissed until it does because the company is making no effort to alleviate their concerns. A negative Nelly mindset is the only valid mindset for many groups of people per their investment style and time horizons, of which there is no definitive "correct" approach. Anything else is just hope. More hope. As always, hope. Hope, hope, hope. What a drug. If there was a pile of money to match all the hope, it'd have its own gravitational pull.
Cover in the $4 range!? That's dirty -- you guys aren't letting it drop past $5. Not even rewarding people for helping you guys along getting to $5?
We'll find out whether we live in a make believe world soon enough. This is something we will get an answer to in due time, unlike everything else.
If/when you see a large percentage of the shelf pre-allocated to private placement(s) I hope you're willing to come back here and take this situation more seriously. I won't say "I told you so" because what I'll be interested in will be the options available to us at that point.
No neglect, that post was made in response to a question that assumed foul play was indeed happening, so I addressed it as such.
Honest question -- let's say it does play out the way I outlined. Is there any recourse we as retail have, or is that it? Pack up and go home?
Going to take a break from my posts for the weekend and see how this continues developing. Spamming never got anyone anywhere.
My idea is it plays out one of three ways. People will be sure to jump on how this is similar to "it'll go up, or down, or stay the same", but whatever. It's not intended for them.
1) The shelf is used in part to cover the 10M shares and part dumped on the market. The ensuing volatility and partial collapse provides the rest of the missing shares. Look for the company to be taken private very soon after.
2) The price descends some more towards $5 and the shelf is used to cover the full short position. It doesn't necessarily need to reach $5 if the shelf is applied at a slight discount. I think this is less likely than option 1 because it draws too much attention, but there's an argument that the short entity would have to carry risk and fend for itself in finding the rest of the shares. Still, look for volatility and a decline leading to the company being taken private very soon after.
3) The shelf is spilled entirely onto the market. This plays out very similar to 2, but I think is less likely because it carries even more risk for the short entity. Like option 2, look for the company being taken private soon after.
I am not suggesting you buy, sell, or do anything at all, and never would. That's not what I'm here for.
I said in another post that I expect everyone, including Amgen and the other institutions, to come out whole and with profit if they hang on for the pittance of a buyout we'll probably get. But I don't expect the profit to extend far beyond the 2015 peak, if at all, and others seem to agree for different reasons.
Since all these other entities come out whole as far as their initial investment, they probably would just take it without repercussions and move on rather than waste time and money trying for an investigation. Meanwhile the true spoils would go to the short entity, who will have taken the company private and flipped it to BP for the vast sums that we've been waiting for for years.
Based on the figure, it sounds like you're arguing that they're shorting shares they own, but what's stopping them from borrowing to short like everyone else?
Again the assumptions here are that this is all taking place under some other fund, not "Adage" per se.
So what you're telling me is that if Advaxis goes bankrupt and Adage has 6M shares held but 10M sold short, they'll break even? Come on.
This approach lets them incrementally de-risk their initial long bet in the event the company fails as long as the upside remains capped, which someone has tried extraordinarily hard for an extraordinarily long time to do.
It's not a new conspiracy, it's just more detail for the existing one.
If they'd take it this far, then not sending in a form shouldn't remotely come as a surprise. Most likely they'd be doing it through a partner fund anyway, though, so it doesn't really matter.
Like I said in another post a few days back, there's probably very little to no naked shorting going on based on an analysis of publicly available fail to deliver data over time.
How can you even say that unless you're for some reason assuming the shares held and shares sold short are 1:1? If I hold 6M shares and use my reputation to inspire confidence in buyers all the while shorting 10M shares, I'm net short 4M shares. Thus I benefit more from downside movement. If I lose control for some reason -- and I won't because I've been killing every rally for years while slowly building my short position and now nobody wants to tango -- I still have my 6M shares to stand by.
It's only sudden if you live in a vacuum and refuse to look at all the facts in concert. I've watched my investment lose nearly half of its value with absolutely nothing to show while the company continues to say nothing and travel around the world on my dime. I can no longer tolerate sitting around and I hope to find others of the same mind.
Of course I know it's illegal. And I sincerely, sincerely hope they rot in prison for their rest of their lives if it's true.
The "charade" will continue as long as the company continues to be opaque and possibly dishonest.
There's something to be said about hedging. Everyone seems to consider only one direction when it comes to Advaxis -- that funds are hedging their long bets using shares sold short.
How about the reverse? It's entirely possible that Adage is in fact net short, possibly through subsidiaries and friendly funds, and hedging that short using their long bet. Of course, we don't know, since those are "proprietary strategies" and all.
Naive assumptions about the morality of others has proven time and time again to be a mistake. Especially in the securities world.
Or have we forgotten Milken, Madoff, and countless others already?
For what it's worth, I believe there are two story lines transpiring simultaneously: the hedge fund story and the Advaxis story. I, along with just about everyone else, do believe Advaxis has the goods and they mean well. They may have gotten tied up in this situation out of desperation due to past financial hardships. I don't think the FDA hold was part of the plan, but I do think it was a welcome surprise for the hedge fund angle.
Fbg, I respect you. You've never been afraid to stand up for what you felt even through all the ridicule and short accusations. This is no different, and I know part of you must understand that. I'm not telling anyone to buy or sell, and it's not my intent to sway anyone into doing either. My intent is as I've said, to make noise and similarly elicit noise from other concerned investors. The company's investors deserve meaningful answers. From the company itself. Enough fluff and can kicking.
I AM a cynic, and am being absolutely as transparent as one can be on an anonymous board. I could never provide proof of my position simply because if the theory is true, I have no way of knowing who I'm dealing with and what they're capable of doing when pressed. See Dendreon's story.