A couple of thoughts after a down day:
"In the short run the market is a voting machine, in the long run it is a weighing machine." --Warren Buffett.
I guess yesterday was one of those ugly voting days. Perhaps the stock was due for some profit taking??? However, the selling was catalysed by a biased and factually wrong letter that was way behind the curve, written by an anonymous short, promoted by a feckless publisher. If that's the best they got, I feel pretty comfortable. Eventually, the stock moves to "stronger hands" and the science will "weigh in".
On a different subject:
I have mercilessly berated the CFO at PPHM in the past. Now, I see improvement at long last. The decision by PPHM to suspend ATM selling is the correct one. Contrary to "recent fiction" there has been no ATM selling that I can detect for nearly five months. The "rarer" they make the equity the better it will be for us all. In addition, the burn rate is dropping because revenue at Avid is rising and expenses are burning off in the larger, more expensive clinicals. The 7mm in prepayments to Avid was a pleasant surprise and the decision to leverage Avid is IMO also correct.
PL actually appears to have a plan. This is in marked contrast to his "finance as you need cash" MO. PPHM cash plus leverage should see us through a year and may be large enough to affect the "going concern" accounting letter if they take the full 30mm. I expect a lot of science and a lot of FDA and a lot of partnering news, and a lot of growth at Avid over the next year---so IMO PPHM is in a much more comfortable position.
On the subject of IR I have to take the opposite side of KT's argument. This stock has been slapped around at least four times in the last couple of months. Not policing your own market makes you look weak. IR has not learned the same lessons that even PL has mastered. "Price" is a fundamental. It affects corporate perception, corporate funding, and it affects PPHM negotiating posture. Wild lawlessness in the market place is not good for the shareholder/owners of PPHM nor for future shareholders PPHM wants to attract at ever higher prices.
IR seems to take the narrow and archaic position that their function is to set up institutional meetings and to put out PRs when there is news. IMO they are living in a 20th century world and fighting a sort of trench warfare. In the modern 21st century world, fiction can go viral in less than a second. Occassionally, you may need some form of "rapid response" and you may need to be prepared in advance (again a plan of action) should circumstances warrant. If IR is loathe to get down in the mud with the swine and respond directly, they should be prepared with other types of "flanking response". They do of course control the news flow. They can reiterate news, restate or update news, put out new developments they are holding for the right time. Stabilizing action from time to time is not a bad thing.
I do not see much IR effort to reach out to media beyond the PPHM news ticker. Why should only the bogies have access to the media?? PPHM should be preparing the media soil for big things to come and sharpening their media skills as the company approaches bigger news.
Lastly IMO, IR seem to harbor the feeling that somehow institutional shareholders are better than retail shareholders. Perhaps it is because institutions are larger (which they are) or because PPHM thinks they are more knowlegeable or smarter (which is dubious with this crowd).
The whole attitude at IR is sort of like Obama politics in reverse with the elite being favored. Why should we be divided in any way?? Are we not all shareholders?? Can you not get a good idea from an individual shareholder as well as an institutional one??? Are these guys not aware that many individuals hold some multiple of 100,000 shares in their accounts.
In addition, I can think of at least four brokers that carry between 2-3mm shares on their customer retail book. These same brokers also speak to institutions and to the analysts at their firms. I am sure there are many more such brokers than the four I am familiar with because I don't know any of the guys that work at JMP, or Wedbush, or MLV or Roth.
While PPHM IR is courting institutions maybe they should develop an outreach to retail and set up meetings to host this class of shareholder. Memories are short. It wasn't retail shareholder selling that drove the share price to forty cents during the Russell rebalance. I hope IR changes their attitude in this regard. If PL can change, I know IR can improve.
A retail meeting in the NYC area would be a good start. Several brokers would be glad to contribute a conference room.
Lastly, I leave IR with one simple piece of advice. PPHM has the single, greatest regulatory authority in the world working for the company. Somebody in IR should double or triple check his "hookup" before the next conference call so he isn't made to look like a bumbling idiot (last 2 CC) which assuredly he is not. Shareholders are waiting patiently to hear Dr. Garnicks' comments "in detail" as to where PPHM sits at the FDA with regard to Cotara and Bavi in all its manifestations. It would be pleasure to hear in Garnicks' own voice his reasoning on Cotara and on AA for bavi.
Best Regards,
IMO
RRdog
