The macroeconomic environment is unlike anything investors have seen in at least 40 years, which is longer than most investors have been investing. Undercapitalized companies—a set that includes many small/midcap biotechs—are naturally going to be hammered in this kind of macroeconomic environment.
Right now, even well-capitalized small/midcap biotechs are getting pummeled (the baby/bathwater phenomenon), but owning these stocks is relatively safe insofar as you can wait out the bear market without the risk bankruptcy or pseudo-bankruptcy via massive dilution.
My two largest biotech holdings are: ENTA, which has a low cash burn due to royalty income; and RVNC, which issued a large non-convertible debt offering two months ago that now looks like a stroke of financial genius.
“The efficient-market hypothesis may be
the foremost piece of B.S. ever promulgated
in any area of human knowledge!”