WOW...What a difference two months make.
In early April I wrote my first post on this board. It primarily addressed the issue of determining the correct Odds for this investment/gamble, in addition it challenged eric to put some skin in the game by taking the other side of the proposition. If you remember back then, PPHM was flat lining at $.37-.38 for weeks.
Let’s review some recent history...
In your post #34980 you wrote “As for a personal "bet"? One would be a fool to risk $200 for a $1 return when one could short PPHM stock at even dollars based on the same hypothesis.”
You very clearly implied in your post that you believed that my calculated Odds were to rich for you; that means that the better bet was to go with PPHM...Hmmm...But you can’t...That would mean that your brother was right...That doesn’t work in your world...Now...Does it...?
Hmmm...
Now lets look at your shorting hypothesis...
If you shorted...
10,000 shares short @ $.37 = $3,700.00 Maximum gain (Goes to 0)
50,000 shares short @ $.37 =$18,500.00 Maximum gain (Goes to 0)
100,000 shares short @ $.37 =$37,000.00 Maximum gain (Goes to 0)
At today’s close of $.81 your current risk is...
10,000 shares @ $.81 = $8,100.00 - $3,700.00 = $4,400.00 LOSS
50,000 shares @ $.81 =$40,500.00 - $18,500.00 = $22,000.00 LOSS
100,000 shares @ $.81 =$81,000.00 - $37,000.00 = $44,000.00 LOSS
Hmmm...Potential margin call at 44K...?
LET’S FACE IT ERIC THAT WAS A BAD BET AS WELL...!!!
For the sake of mathematical correctness the pre- phase I odds should have been:
0.65 X 0.33 X 0.66 = 0.14157 ~ 14.2%
Not the value that I stated in my April post.
Copied below:
“Suggests a purely statistical success rate going forward of (3x3x2/3) = 1:12 that is one in twelve or ~ 8.33%. In other word statically Bavi has roughly a 1:12 chance of successfully completing a Phase III; from historical clinical trails"
Which would have provided a calculated Odds of 1:100 NOT 1:160 on April 2, 2009
New Odds:
With one of the three Phase II trials completed and the other two enrolling in their second half; I think we can reasonably conclude that; most likely there will NOT be a surprise negative safety issue that surfaces in the Phase II trails. So for the moment I’ll conclude that the current Phase II’s will be successfully completed.
That leaves only the historical statistical success rate for the phase III in the equation
~ 66%
From my previous post #34948
Please note the corrections:
So what we have here is a semi-scientific assessment of the investment known as PPHM.
12 Should be 14.2% ( Statistical number from #1 above)*4 Should be 25% (number assigned to partnering prospects)*5/3 Should be 60% (weighted management skills)*2 Should be 50% (Reverse split impact) yielding a potential success ratio of:
A 1 in 160 (Should be 100) chance of success.
This should have been (In my original assessment in 2004) the risk/reward ratio prior to the start of the Phase I trail.
Modified with the new statistical number yields:
66% (New Statistical number)* 25% (number assigned to partnering prospects)* 60% (weighted management skills)* 50% (Reverse split impact) yielding a potential success ratio of:
(0.66)*(0.25)*(0.60)*(0.50) = 0.0495
A nearly 1 in 20 chance of success.
This implies that this investment (At today’s price ($0.81)) should yield a price of $16.20 for it to satisfy the risk/reward ratio.
Hmmmm....
Is that doable...???
226M shares outstanding...
Today the enterprise is valued at ~183M
At $16.20 the enterprise is valued at 3.66 Billion...Half the value of one years revenue from Avastin...!!!
Geez...
Let me point out eric...In two months All of my purchases including the following are in the money:
From my order history:
7/31/2007 PPHM BOUGHT 4000 SHARES OF PPHM AT $0.74 ($21.80) $0.00 ($2,981.80)
6/29/2007 PPHM BOUGHT 4000 SHARES OF PPHM AT $0.7499 ($22.00) $0.00 ($3,021.60)
And the ones that were purchased at $.29 are WELL into the money.
FWIW I sold a portion of my holdings @ $.71...Nothing like reducing ones risk from time to time and accumulating free shares...
Here’s my view going forward...
I believe that management is negotiating in earnest a partnership. I think that the science is currently validated to a Phase II level.
As several posters have indicated...There are a lot of things happening with this enterprise...Most of it is good...
Soooo...
Eric...
I’ll take on your challenge from your post # 36981...
Reprinted below with my comments:
RE "Do you dare go on record right now, or do you wait it out? You know a PR could be in the wings today so i think you are hedging conservative, but you know as well as anybody that something big is looming."
Here's my expectations:
1. No PR before todays close, or none of any substance.
Nice waffling...But meaningless
2. Stock fails to reach $1 and the Russell is missed (again.)
Management has never stated that Russell inclusion was a goal.
3. ASCO next week will yield expected (i.e. similar) results to ones we've already seen for Bavi-cancer-Georgia.
AND...
4. No $100+ million partnership announced at or shortly after ASCO. (remember even that would be a lousy ~44 cents per share).
Here’s the meat...I’ll wager you at the “Bonus 1:20 New Odds” that Management will negotiate a partnership before 12-31-09
5. "sell the news" crew out on Monday (i.e stock drops)
Sure there was a slight dip in price...But the closing price on the day you wrote this was $.82; today’s close is $.81...!!!
Let's see how I do.......
So, do you or anyone else care to go on record to the contrary? I'll be waiting.
I HAVE gone on record...And I was right...You sir were wrong...I made money with this enterprise...You have NOT.
Show me the money.................
Otherwise this is still a nearly broke, danger of reverse split stock.
Most people understand this...Most investors have expectations that there will be a partnership...That the full potential of this technology will be realized. All you are hoping for is that your brother will fail...
How sad is that...!!!
Best of Luck to all longs...
Regards
Golfho
