Avid Bioservices Inc (CDMO)

[keep_trying]

Jake, you wrote, "My guess is they want low prices for the options grant. And with the ATM and the ability to control news flow, my bet is low prices until they get options".

I am guessing you are on track about "Options" but they are not the kind of options that go to PPHM management. Another channel that I think more likely answers to your suppressed pps point would be that the unknown parties influencing PPHM stock price may want to hold down the pps until the majority of Call Options expire. I posted in today's NASDAQ listing for PPHM options below, for reference. What is noteworthy is that the Put Options are pretty much all cleared out now. There are only 8 Puts showing open interest (800 shares) going all the way through to April 2011. Puts and calls show zero for the September 18 expiration. The picture is more murky for Call Options open interest.

In contrast to the October 16 whopping big "1" put set to expire, there are 12,275 Call Options (affects rights to buy 1.23 million shares). Based on what has been posted on this board since the PreASCO and Russell rebalancing period, I am guessing that a good number of those call options are held by smaller investors (to clarify: none by me). Call Options may not be held by the party(s) that established the expired 20,000+ Put Options that appear to have delivered a nice pay day for whomever was involved.

Consider that, if the parties that set up the options offerings were the same as those buying those put options and saw the pps move to $5+ or the one year analysts' outlook target of $10 pps before October 16, whoever orchestrated the recent Put Option payoff would need to return most if not all of their gains by paying out potential sums in the millions for the October 16 Call Options. Or consider that those parties that moved the pps down to make the Put Options in the money in the first place would merely need to keep the pps suppressed to current levels until after October 16 expiration and regroup their strategy then, locking in most of their Put Option payoff. Bottom line is that the Put Option orchestration for gain is not complete until the Call Options issue is cleared out.

It is possible that the same parties that orchestrated the Put Options payoff also hold most of the Call Options, staggered with timing three months lagging the July 2010 Put Options expiration. In that case, we retail investors might get an October surprise bump in the pps, but I am guessing that there are too many retail held Call Options to make that a clear strategy. And yes, a cloud of uncertainty surrounds trading information for retail investors as PPHM is launching a critical Phase 2 Bavi trial, awaiting Government Contract extension/renewal and Annual Shareholder Meeting developments, making another round of cover for October 2010 option traders like occurred around June/July Russell rebalancing and ASCO developments.

And no, I don't see the conspiracy theories about PPHM management being linked to the Options trading having any credibility. I consider posts of that nature as likely part of the "smoke screen" raised by the parties seeking to move the pps to their options trading advantage, keeping retail investors from getting a more clear picture about what is happening with PPHM trading, shaking the tree and likely discouraging retail investment that interferes with the financial outcomes desired from the October options expiration.

Consider that after the October 16 options expiration date, there are only 1179 call options showing open interest (117,900 share purchase rights). Although most of those expire on January 22, 2011, it doesn't seem like consideration for around 100,000 shares of options value is enough of a cost risk hindrance for a party to try to invest a lot to hold back the pps. Or perhaps it is? Doldrums carried through mid-January would clear out all but 50 Call Options (5000 share rights), leaving the original Put Option parties clear of any downside risk from the PPHM pps taking off to $10+ pps territory.

Finally, consider that PPHM will likely not have major, new trial results information to share until 2011 or Government trial money grants until after the start of the next US Government Fiscal Year (October +/-). That suggests that those who believe that PPHM has the goods can anticipate a good buying opportunity through just before the PPHM Annual Shareholder Meeting after which comes ?????? Hopefully, ?????? is PPHM delivery on pps moving milestones that shift the pps towards beating the analyst $10 pps one year outlook estimates.

The whole situation is enough to make one ask whether options trading really delivers the liquidity and pps stability that is cited as a benefit from this risk hedging instrument.

Best wishes and IMO.

KT

PPHM Options: Composite CBO PAO AOE NYO PHO MOE BOX IOE BTO NSO All Call Put At the Money In the Money Out of the Money AllGO

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Option Chain for Peregrine Pharmaceuticals Inc. (PPHM)

Calls Last Chg Bid Ask Vol Open Int Root Strike
Puts Last Chg Bid Ask Vol Open Int

September 2010
Sep 18, 2010 0.05 0 0 PPHM 2.50
Sep 18, 2010 0.95 1.25 0 0

Sep 18, 2010 0.05 0 0 PPHM 5.00
Sep 18, 2010 3.40 3.80 0 0

Sep 18, 2010 0.05 0 0 PPHM 7.50
Sep 18, 2010 5.80 6.30 0 0

October 2010
Oct 16, 2010 0.05 0.15 0 1515 PPHM 2.50
Oct 16, 2010 0.90 1.00 1.30 0 1

Oct 16, 2010 0.10 0.05 0 1241 PPHM 5.00
Oct 16, 2010 3.40 3.80 0 0

Oct 16, 2010 0.05 0.05 0 9519 PPHM 7.50
Oct 16, 2010 4.20 5.80 6.30 0 0

January 2011
Jan 22, 2011 0.15 0.05 0.25 0 295 PPHM 2.50
Jan 22, 2011 1.05 1.30 0 0

Jan 22, 2011 0.10 0.15 0 584 PPHM 5.00
Jan 22, 2011 3.19 3.40 3.80 0 7

Jan 22, 2011 0.05 0.05 0 250 PPHM 7.50
Jan 22, 2011 5.80 6.30 0 0

April 2011
Apr 16, 2011 0.30 0.30 0.65 0 50 PPHM 2.50
Apr 16, 2011 0.75 1.70 0 0

Apr 16, 2011 0.30 0 0 PPHM 5.00
Apr 16, 2011 2.80 4.40 0 0

Apr 16, 2011 0.55 0 0 PPHM 7.50
Apr 16, 2011 5.10 7.10 0 0

Sep 08 12:08 PM EDT




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