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Nice release. Wouldn't worry too much about profitability. Markets don't care about that much anymore (in similar settings) so long as there's a sufficient growth narrative for market participants to be blinded by.
It's remarkable to me how some tend to forget that the stock price went from ~$2 to ~$16 in 15 months. Markets price anticipated future performance into current share price. That was your "hockey stick."
An anecdote for your reading pleasure:
I invest in all types of assets/classes. I particularly like investing in emerging hedge fund managers because they tend to keep their addressed markets small and really have their fingers on their respective market's pulse (relative to larger generalist funds, etc. This is a discussion for another time). The number of healthcare/biotech-focused managers that are up this month is quite literally zero. Moreover, they're down significantly. The mean of the seven funds I receive performance updates and commentary on? -21.92% for October alone.
So, what are they doing? Sure, their benchmarks are down as well; but after all, most prudent investors will write off managers that take this much volatility in a single month as either unable to mark their books properly (which isn't the case here as these are rather liquid securities), or just simply a dogs**t risk manager. The answer? Most of them are on an absolute mad dash to raise as much capital on the back of this selloff as possible. I've gotten more premature (by a week, I might add. These typically come out well into the following month) month-end letters advising me of new fundraising activity specifically to take advantage of what's on sale right now.
Why does this matter?
Forget Cryoport for a second. If you're even remotely bullish on the space and you're not buying here, I don't know what you're doing. They could be totally wrong and trying to catch the sharpest of falling knives. Conversely, if they're right, you'll see a bullish squeeze of great proportions in the near future.
Like I said, this wasn't so much about Cryoport as it was about the entire biotech/biopharma market. But the correlations between the two exist and are not insignificant.
This is the chart worth 1,000 words.
https://ibb.co/kqEj8A
I can imagine.
Though I should know this already, I don't even want to know what this thing looked like in '05. Props to you (yes, I know I played this in the opposite way as we were bantering like children a year ago) for digging in.
Nice point on Fred Alger. I wouldn't scoff at it either.
As I've become incrementally more interested in a handful of private deals over the past few months, my data feed on this front has been commensurately weakening. That said, I have to imagine there are takeout parties looking for this thing in the low-double digits. Like I said, my data's weak. But hey, even a blind squirrel finds a nut every once in awhile. Then again, maybe not quite yet as the financials are still, per your comment, Cold, piss poor. But remember, Shelton could make this thing profitable in a single day. He'd throttle his shareholders and it'd be divinely paradoxical, but he could do it. And I'd imagine that matters to someone, somewhere.
All in all, it's still super compelling for anyone looking to get exposure to cutting edge therapeutics without the idiosyncratic risks of individual drugs. Is it a slam dunk, home run anymore like it was last year (about the time I came around ;) ;) )? Absolutely not. But it's still a very interesting play.
I wouldn't even sweat the price action. Just keep your finger on the fundamentals and serviced market. Trade around that, not the price.
EDIT: (to everyone) Also, go see post 11327. Keep that in mind.
Here's Alger's model in a nutshell: https://imgur.com/a/SJTmywv
Will follow up with specifics and further comments tomorrow.
Well, at least cold came back with a rifle shot.
Oh, yeah. . . What he said.
It's been awhile..
Glad to see you all have reaped good returns from a rather performant name as of late. Good on you and all that stuff. That said, I'll provide a few cents worth of my insight (not that my take is oftentimes worth even that much):
1) Immaterial changes in short interest are not good barometers for short-term price action. Don't read into it too much. Remember, if it were that easy, everyone (or at least institutions) would do it and it'd get arb'd out in no time.
2) Don't underestimate the value of indexing flow. Sure, the analysts have all revised upwards and all that jazz; but a non-insignificant portion (intentional double negative) of this move above (**don't quote me on this figure b/c I'm pulling it from memory and don't have my model in front of me**) $13.50 should be attributed to inclusion in relevant indices. While I've not read anything specific, I'm sure this has floated around the boards.
3) In my opinion, volume forecasts are far more important their price counterparts right now. I won't dig into this too much.
4) Strong numbers need to be read out for Q2. This price feels incredibly top-like and heavy, so if my analysis of the serviced market(s) was (were) giving me anything close to a red flag, I'd be extremely cautious.
Anyway -- like I said, take it for what it's worth. It's been a great few months since I pitched the name to a group ~20 institutions on Friday, Apr. 20 in Miami. It's sure made me look good, but I'm not sitting comfortably up here. There's still a significant amount of work to be done before this thing is even remotely close to being held in the drawer.
Also, as an auxiliary point of advice for those who dabble in financial markets at the retail level: Before you chalk something up as a 'win,' make sure you understand whether you were right for the right reasons. It's very easy to be right, but for the wrong reasons. Unfortunately, that will hurt you over time.
Aaaaaaaand whipsaw.
Q1 CAR-T numbers have been lackluster across the board. Nobody interested in CYRX wants to see that.
Where's the person that called the bottom at $8-something? What are your thoughts?
Management has earned this credit: They've never changed. If you all are concerned about their meetings with various investment banks, then get on the phone with IR and figure out what the substances of the meetings were. Or ask a question on the call in a week.
I must be being Punk'd right now. You do understand that might Provenge single-handedly bankrupted Dendreon, yeah?
What are you right about? We, at the most fundamental of levels, disagree about dendritic cells being the "future", or whatever you said.
I will thank you, however, for providing me a very legitimate and hearty chuckle.
Take a bow. Thanks for the healthy discourse over the seven months I've been around.
I'm very happy for you to see the Cryoport situation for what it is. Best of luck to you in all of your future endeavors.
You're right - Provenge did wonders for Dendreon.
If your logic (and the assertion that I subscribe to "conventional wisdom") is founded upon a single presentation at last year's ASCO, then I have nothing more to say. I could respond to you, but you wouldn't understand it, and then we'd all move along having wasted more time than was necessary.
Cheers.
I've seen some rather odd posts over the past few days. Even though they're not directly related to Cyroport, so to speak, here are my thoughts:
1) The oral administration route isn't going anywhere. Period. While you may see an uptick in non-oral routes of administration commensurate with growth in gross number of pharmaceuticals available on market, orally-administered drugs will always have their place. (A bit of conjecture there at the end, but I'll take that bet 101 days out of 100.)
2) On dendritic cells: Might I ask why that's the "fulcrum security" of immunotherapy? I fundamentally disagree, but would love a cogent explanation as to why you all (I forget exactly who said it, but didn't see any disagreements) find that to be the case.
Lots of good data at AACR over the weekend. None directly affecting CYRX, but it's good to see industry-wide progress in new fields.
I didn't read the essay from a few posts up, but here are my thoughts, Ice:
I rarely look a shareholder/management alignment gift horse in the mouth. While I understand that the figures are seemingly de minimis in size, it's a positive step for shareholders. I wouldn't go so far as to say that management "knows something" specifically, but rather see this is management being relatively bullish themselves on the business generally.
1Q18 numbers are of course remarkably important. Comps are spitting out good data.
I know it's a bit late for your nightly reading, but this is big time: https://www.reuters.com/article/us-cancer-medicare-yescarta/u-s-medicare-sets-outpatient-rate-for-yescarta-reimbursement-idUSKCN1HC2N3
Medicare has assigned an $80,000 copay for Axi-Cel. I'm not certain this article's factually accurate, but it's good to be up to speed on this regardless. There's a case that it could cost as little as ~$1,300.00.
Shelton's Form 4 just hit the wire. Would be interesting to take note of what he does with the position. Remember, some will likely be sold for tax purposes.
All very good points.
I suppose I'll rephrase a bit: If there's a sustained, significant sell-off in equity markets, this is a company that I'd expect to eventually trade at par (at best, potentially at a discount) with their book value.
Have a nice holiday weekend ahead as well. I enjoy the discourse!
It seems you're all forgetting an incredibly important (debatably the most important) component: the broad market.
Circling back to my point(s) about high forward P/S multiples, broad market sell-offs will seriously drive a screw into what the market's going to be willing to pay for this thing -- regardless of the built-in "replacement cost".
Sure, I understand Cryoport isn't indexed and thus isn't subjected to indexing flows, but it's by no means agnostic to markets as a whole.
Regarding EoQ rebalancing: Yes, I agree that there's a bit of rebalancing going on in the name. As was stated, performance has been good in Q1, and thus you'd expect a bit of selling into quarter end. That said, it's irresponsible to assign any meaningful percentage of a 17+% sell-off to rebalancing.
This will quickly go back to $4.00-5.00 if you have a sustained equity market sell-off. Institutions won't care about the replacement cost. You'll have RV guys coming in and smashing your multiples down to Earth. If that happens, this thing will need to turn profitable quickly in order to resume trading higher.
Just my personal thoughts. Not necessarily representative of my firm's.
If you're looking for signals of strength here, look at the volume prints on the selloff from the 10.2s. They're abysmal when compared to what was seen on the most recent run up.
If you're looking for a contrarian view (which you should always do and/or be mindful of), look at the price action at the highs. Lots of selling pressures in ranges. Think about where they're coming from.
Regarding all the silly price patterns and "signals" and whatnot, I'm not saying they don't have their place and might hold their own in certain securities, but names like Cryoport likely aren't where you're going to be able to isolate an edge by using them. Remember: if something is that simple and durably lucrative, many entities would be doing it, it'd get arb'd out, and be useless in no time.
My advice: Don't get whipsawed. Everyone here has at least read about where the serviced market's anticipated to go. If management stays the course, you'll see steady ramp-ups in top-line figures and that'll trickle down nicely. You are going to see a bit of multiple contraction as revenues come in, and that will manifest itself in the form of slower share price appreciation. But that's what happens when you have massive forward revenue multiples pulled into current share prices -- no big deal.
Have a nice weekend ahead.
Thanks for the kind words. I'm glad to hear you follow along in the Twittersphere. I don't tweet much, but when I do, I do my best to keep things stimulating and informational.
Regarding the sales multiple: Your point is exceedingly well taken. The argument I was beginning to construct was that there are a considerable amount of forward earnings pulled into the current share price, thus allowing it to trade at massive premiums to any qualitative data point. That's all fine, well, and good. . . until (for the sake of this board) God forbid it isn't.
To shareholders, the most concerning potentiality to trigger the "isn't" component is, in my opinion, the dynamics of the serviced markets. I know you know this, Cold, but Cryoport shareholders don't need to be focused on diligence-ing the products nearly as much they need to be diligence-ing the addressable markets.
Right now, the sexiest use case is CAR-T. It's hotter than hell, and for very good reason. But we all know how Q4 turned out, and most importantly why it turned out that way. It doesn't look like there's any sustenance to the issues that plagued Q4 (reimbursements, blah, blah, blah), but that's what could really beat the shit out of the share price over the longterm. They're well-capitalized, so I'm not concerned about another secondary -- not at this point, at least.
Shelton made a point that I certainly under appreciated until I went back and read the script. While I don't have the exact quote, he made the point that, if he wanted to, he could machete expenses left, right, and center, and make Cryoport profitable tomorrow. He'd sacrifice most if not all of the potential future of the business, but he could do it nonetheless. That's not particularly an uncommon point made by heads of unprofitable publicly-traded companies, but it struck me here. I'll follow up on this when I have further reflections.
Ultimately, Cryoport's a takeout name. For one reason or another, everyone here seems to think or know that. This idea is generally supported rather well, but most notably due to the fact that few (if any at all) of the pharma cos have chosen to handle logistics internally; they've all favored the outsource model. I find this extremely promising.
I'm leaving out at least a few thoughts, but I'll get off my soapbox for now. Hope this helps at least someone. I remain excited for the future. Cheers, fellas.
I keep seeing the word "accumulation". Admittedly, I've not a clue what it means in this context other than it seems every person has their own take on its definition and/or significance.
If you're a retail investor who wants to try and read tape, I trust you'll find this helpful:
Understand the power of confirmation bias when it comes to your portfolio. Maybe instead of looking for confirmatory signals, look for the opposite. Try and understand why people who are either unloading their shares or on the side of the trade as you are doing so. This behavior will almost invariably makes you a better investor.
Ultimately, in your minds, you know the story; you know why you think the market should be pricing this thing at $10-15. If you're constantly looking for holes in your rationale, you'll find that you gain a much better understanding of the position, and thus will be more comfortable in it. Conversely, if you in fact do uncover a lapse in your understanding, you'll feel confident in adjusting your position accordingly.
Institutional flow has momentarily picked back up. There was some great PR on the name in an extremely-high-dollar publication at the beginning of January. I'm still a bull, but there are obvious kinks that need to be thoroughly ironed before the company has any chance to meaningfully grow.
Best of luck to you all. And remember, don't read too much into the action. Take pride in being able to discern the signals from the noise.
This biopharma m&a market is currently as hot as hell. While this may not continue and can literally cool off instantaneously, that doesn't seem to be the likely outcome.
A note of caution: If you're not exchanging your warrants, you're likely going to be holding some exceedingly illiquid product in due time.
Don't be surprised if it doesn't hold through the session. Solid bids, but likely not coming from a diverse group of bidders.
Cold,
Re-reading my most recent post, I apologize if I was abrasive. Certainly wasn't the intention. Of course, given my history of "coming in hot," I should've been more mindful.
To your questions awhile back - while I don't remember each question word-for-word, I do recall reading them and thinking that a few were going to be off-limits at the time. However, we're all, in effect, on the same team here. I'd like to be as helpful as possible to you all, unfortunately right now I don't have time to come here each day and actively participate in the discourse.
Quickly - good eye on Roth's initiating coverage. I'll point out to you that Richard Baldry, Roth's analyst on CYRX, isn't even on Roth's healthcare research team. In fact, he's the sole software analyst on their technology & media team. Hmmm...
Regarding my comment about Cryoport becoming interesting again at a six handle or upon new material developments: I still stand by that statement. Is it that simple? Of course not; it's never that simple. However, put concisely, that's the best way to summarize the most likely catalyst for renewed institutional interest.
Hope that's helpful for now. Feel free to ping me with other questions or to tell me if I've totally missed the ball here. I'm writing this as I'm about to crash from going on four days with ~18 hours combined sleep.
Hi - don't mind me, but allow me to provide a few cents worth of opinion:
I know you may fundamentally disagree with this, but it's typically ludicrous to think that you've got the market beat, or to think that you know better than everyone else. While that goes for anyone, this behavior, when unfounded, is typically seen in retail investors more frequently than institutions. Over time, it's a great way to lose money.
If you think you have the market beat, then you should be able to answer this question: What's your edge? Of course, the answer should be held closely, but it's something any active investor should ask themselves at least once each week.
In the case of Cryoport, it may not be well-covered at all -- there are now five institutions covering them. However, those aren't the people you should benchmark yourself to. Measure yourself against the other institutional analysts that provide opinion into positioning -- whether their firm should buy or sell. Unfortunately, unless you have an interest in or relationship with funds or institutions that analyze and/or are investors in Cryoport, there's really no way to know what it is that they're considering in their models. Further, aside from certain public filings, you have no idea what the firms market activity really looks like.
Unless you know much, much more than you disclose and discuss on this board, I can assure you that many of the relevant institutions know at least as much as you do. They do this for a living, have access to unfathomable amounts of data, and it's safe to assume they make use of all of it. That said, everyone's forecasts are different. The way you interpret the data on-hand is likely different than the way Fund A interprets, which is different than they ways Funds B and C interpret.
If I may, out of genuine curiosity, how long have you been a Cryoport shareholder? No worries if you don't care to disclose. I'll post later today with our most recent thoughts.
Checking in. Been awhile.
No material change in the thesis. Could we be in better hands? Absolutely. Is anything going to change in the near future? No.
More than one *significant* institution is holding out because of this. Unfortunately, my involvement has steadily waned since a month ago.
Let me know if I can help answer or shed light on anything. Sounds like many of y'all are still following the story quite well and are tuned-in to the fundamental issue.
Volume's abysmal. I'd imagine most actives are lightly bidding into this. Almost my entire sector watchlist is heavily offered today. Wouldn't sweat it.
Great question. Management met with Deutsche either yesterday or the day prior. Don't be surprised if you start to hear rumblings of a secondary offering.
While I was certainly looking for CYRX to catch a bid today and am left scratching my head as I think about why it didn't, I'm not particularly concerned. In fairness, ~$8.00 seems closer to a conservative fair value than $10.00.
Volume certainly picked up this morning, but tapered off and closed 0.85% below the average volume over the past twenty trading days. As for the discussion about short-sellers doing this or that, and stops being hit, I haven't a clue how or why you all believe that's what's happening, but to each their own. SI as % of Float is still sub-4%; total is SI 971,253. It seems like normal market noise to me.
If anything, CYRX is no longer benefitting from the same institutional inflows that you likely grew accustomed to in Q1-Q2. That's not to say that this CYRX isn't on watch lists right now, but unless they either pick up a few more big name contracts at ~$8.00/share or it sells off to a $5- or $6-handle, it isn't nearly as sexy.
@Cold, I haven't forgotten about your question list. I'll get around to it.
A reminder:
You're cracking me up. I've long thought you knew very little about the breadth of due diligence performed by institutional asset managers, but damn, son or daughter (possible,) even then I've still grossly overestimated you.
While I would've loved to pick up 20%+ being short this name from the low-$10s, I didn't. I'm not sure where I stated that I "attended the Car T summit in Boston," because I can assure you that I most certainly didn't. But, please, hang your hat on that. I suspect it'll help you sleep at night. Feel free to ask me the three (totally arbitrary, by the way - ha) most challenging questions that you deem relevant to this discussion and I'll answer them when I get around to it.
I'm not interested in maintaining this petulant banter. If you have something substantive or constructive that you'd like to engage me in, then that's great; I'm happy to contribute. Otherwise, I'm finished with the destructive discourse. Nobody benefits from it.
About the "real" Robert Maxwell that you're referring to: I trust you know that his birth name wasn't even Robert Maxwell, right? But, fair play to you. Source
Here you go:
On Sep 22, CryoPort filed to maintain the registration of 1,640,401 shares of the Company’s common stock issuable upon the exercise of the remaining outstanding warrants originally registered. Yesterday, the SEC approved it. I believe there was a post on here about the Sep 22 filing, but I could be mistaken.
This is dilutive, yes, but is to be expected by a company like this that has had a massive run up over the past months. It's undoubtedly a long term positive in my opinion. Think of it as them raising money into their strength.
Don't sweat this.
For clarity's sake, I co-manage said institution's portfolio. When I said last week that I "brought the trade to an institution," or something of the like, what I meant was that I sourced the trade myself, worked through it, took it to committee, and eventually put it on.
To answer your question: we don't have defined hold periods, and our mandates are rather broad. For compliance purposes, I'm not going to get too deep into our thoughts, but I'll say this:
1) We like the name. We love the business.
2) In April, we set the first price target at $9.50. We never revised it.
3) We're very happy with past performance and look forward to continued success.
In other words, if you think you've seen institutional buyers while this thing has been sub-250mm market cap, just wait until it gets closer to $500mm and/or liquidity picks up.
This thing is only covered by four analysts, has abysmal volume in the equity market, and the total option OI is ~560 if I'm not mistaken. Institutions aren't home yet, by and large. Of course, certain funds have cherry-picked the name and have likely crushed it; but even then, this is likely a small line item in the portfolio and will remain that way until it gets out of the micro cap grouping.
Paul Knight @ Janney has upped PT to $12.00, from $10.00 on 09 Aug. Volume spiked on open, but has since fallen under 20d average volume at time.