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DNDN - The Light bulb went off...? Any opinions, not about the medical aspects but the possible short squeeze that could propel DNDN shares to the stratosphere, whether deserved or not?-Profit_ace

DNDN - The light bulb went off in someone's head on Wall Street on Thursday...

http://www.investorvillage.com/smbd.asp?mb=971&pt=msg&mn=67348

By: skcotswonki

The light bulb went off in someone's head on Wall Street on Thursday...
Someone on Wall Street took a careful look at DNDN on Thursday morning, and like the ship captain in the Poseidon Adventure they looked out and saw the coming tsunami and said "OH MY GOD, turn on those buy programs now, TURN THEM ON!"

Some of the shorts will go bankrupt and will be out of business before this is over.

Stocks are not supposed to do what DNDN did on Thursday, ever. The jump last Friday and the 92 million share day were predictable if Provenge received a strong endorsement from the advisory committee, which it did. Stocks that jump on news are supposed to see their volume decline about in half each of the next several trading days as the story runs out of legs and normal trading resumes. Volume in DNDN fell to 13 million shares on Wednesday. This is exactly what DNDN was doing until about one hour into trading on Thursday, then someone on Wall Street hit the panic buy button.

DNDN went on to trade 60 million shares on Thursday and climb almost 20% on no new news, no analyst upgrades, no events at all that should have caused the stock to trade more than 10 million shares on a get out of town day before the three day weekend.

Now, why has it taken a week for what is about to happen to soak in to someone' mind with access to the buy button on Wall Street? First, and remember this, this has never happened before in this way in the history of Wall Street. You have never had such a leveraged bet to the downside that was so incredibly stupid and wrong going into an event that has almost unlimited upside without the shorts, a chance to own some of the only 82 million shares in the world of the company with the biggest breakthrough in cancer since surgery and radiation. Second, and equally important, you have never had such corrupt and lopsided and wrong analysis passed off as research since probably the late 1920's. Hence, there is not a single research report someone on Wall Street can pick up and read and say WOW, Provenge is a $2 billion plus drug and DNDN is worth 5 to 20 times that $2 billion figure, discounted back for risk and time. That discounted value is triple digits in and of itself. The analysts were still out screaming in the press on Friday and Monday that the FDA would not approve what their advisory panel just voted overwhelmingly to approve, now that's corrupt.

On Thursday, when the buy button was hit on the buy program, it quickly took out an unprepared line of defense at $15.40. The shorts attempted to regroup at $15.88, $16, $16,72, and $17. All of these lines of defense were quickly over-run and the buying program marched straight to $18. This is where the shorts were able to regroup and throw everything they had to stop the wave. However, the only thing they have left to fight with is MORE NAKED SHORTING. So, at the end of the day, net-net, there may actually have been an increase in the short position because of the three hour and 40 million share fight Thursday afternoon to defend or breakthrough $18.

Now, if you have not fully comprehended what I have just written in setting the stage, then stop here and go back and re-read it before you move on to read about the coming Tsunami and the light bulb that went off in some Wall Street Captains head.

First, this person realized that the ASS (Ashcoff, Shenouda, & Sendek) team of analysts are lying. The FDA will 100% not keep Provenge off the market to run the 9902B study, that's right I said 100%. The only risk to approval by May is the CMC section (which is so far so good), or some excuse like working on the safety plan so that the FDA can approve Provenge subject to a 90 day delay which would really be about finishing enrollment in 9902B by mid summer. I give the odds of approval in May 98% and the odds of approval in 2007 99.98%. This Wall Street Captain knows approval of a billion dollar cancer drug in a now small cap company is only weeks away, maybe only days away.

Second, the stock is so heavily shorted that almost every brokerage firm on Wall Street has a negative imbalance (naked short) position. This means in a couple of days, if the brokerage firm does not come into balance by locating more shares to borrow or by buying back DNDN to close out the imbalance, then the brokerage firm can not sell more stock short without first having the shares borrowed in advance or having a stock certificate in advance. No more sell today and I will come up with my certificate or borrowed shares on Tuesday. It will all be C.O.D. for the short side. Now, it is a mistake to think the naked short position has to be covered next week, it does not. It is just that no new shorting in size can occur until DNDN comes off the Reg SHO list. The shorts have lost CNBC, their analyst henchmen have lost all credibility and will not be quoted with nonsense like no approval in any stories going forward, and it will keep seeping in on Wall Street that approval is in the bag and Provenge is a multi-billion dollar drug. My guess is over 30 million shares were still sold short at the close of business on Thursday.

Now, again, go back and re-read before moving forward if you didn't fully comprehend what was just written. The Provenge story is a triple digit story. Unwinding the short position in DNDN is a second triple digit story on its own.

There is a third independent triple digit story which is exploding now and will keep exploding over the next few weeks. The call options for April and May are going to be exercised en masse. Today, there are over 25 million April and May options to buy DNDN stock at $10 or less. Most of these deep in the money calls will be exercised and not sold and the market makers and call sellers must deliver over 20 million shares to the owners of these calls in the next few weeks. And because of Reg SHO they can not deliver phantom shares. This is no OSTK people, this is the biggest story on Wall Street and all eyes are on it. The SEC knows it and every compliance department knows it on the Street.

The fourth independent triple digit wave that may hit DNDN is all of the other call options that may soon be deep in the money for April and May followed by all of the August call options. There are over 8 million more April and May calls written at $12 1/2 and $15 that are now deep in the money and will be much deeper when this stock rolls into the mid 20's next week. There are over 5 million August calls that are deep in the money now.

DNDN was the second most active stock in the market on no news on Thursday. DNDN was the 6th largest gainer on no new news on Thursday. Some Wall Street Captain chose to hit the panic buy button on Thursday. Everyone on Wall Street will want to figure out just what the guy who hit the panic buy button knows come early Monday morning.

What he knows is economics 101, supply and demand. There is tremendous demand over the next several days and weeks for shares of DNDN and there are not nearly enough shares to satisfy demand. DNDN is right now in the early stages of hits parabolic run, not the late stages. There has never been three separate triple digit per share circumstance in one stock in the history of Wall Street before. Well, there is now baby, there is now. Forget the fundamentals, this is now all about froth and survival.

If you want to see $100 by May, then do not sell a single share next week. If you have margin, then move some of the DNDN shares that are no longer needed to support the margin account to the cash account (remember it is not an all or nothing proposition). If you own calls at $10 or less for April, then exercise them this week (you don't want to miss the big run and you don't want to pay ordinary gains anyway). If you can, buy more shares or start buying some of the November out of the money calls. The reason so many calls exist is because they are way to cheap and enticing. They will have to price the calls to a point where you think it is 50/50 to buy the calls or buy the stock, or the swelling call volume will not cease.

Everyone have a great Easter weekend and remember the heart of the Christian message is forgiveness. I believe the shorts will see enough punishment for there crimes and it will be so brutal no one with a memory will dare do what they did until the memory of this generation dies out. I am going to spend the weekend conditioning my heart to find compassion for the shorts. Lord knows they need it.

P.S. I do not have access to all of the different hedge fund agreements, but it could be that some of the hedge fund clients actually have liability if the hedge fund goes belly up. If you have a hedge fund find out if they have DNDN shares on the short side Monday morning and if they do, demand your money back immediately, while you still can.