Biotech Values

[microcapfun]

Hypothetical buyout situation

>>Say you've found a little biotech that you feel has enormous long-term potential but the company gets bought out by a larger biotech/big pharma for a significant premium. So, the stock maybe doubles in one day but then you miss out on all that long-term upside.<<

I agree with Dew's response and feel the above comment is rather ridiculous. Of the few companies I follow closely, it is rare that the most undervalued one is more than twice as undervalued as the next most undervalued on my list. (Read that two more times and it will make perfect sense ...) So if the most undervalued one was bought out at a 100% premium, I could simply use the cash to buy more of the next most undervalued one on my list and be in a much better position than before in every sense except perhaps diversification.

The only real negative in such a case is that I have to spend the time and effort to add a new company to my list and study it to death. Still - I will have been more than adequately compensated for the effort ...

micro