Article was a poor read for sure - but at least someone created some chatter. I passed it along to the Novelos management team yesterday and they were pleased with it - specifically Stephen Lichaw.
It is getting quite difficult but to help you with some of your decisions... PIR a company that was on the verge of bankruptcy was trading at a low of .10 on 3/12/2009. Between 3/20/2009 and 3/23/2009 (only 1 trading day difference, 3/21/2009 and 3/22/2009) the stock gapped UP from .16 to .60 and then the following day the stock went to .80. The stock has traded at a 52 week high of 11.20 on 1/12/2011. NVLT probably cannot go that high without an FDA approval; however, just wanted to paint a picture as to how it works when a company is on the brink of shutting the doors.
SIRI was another company on the verge of BK and was trading at a low of .05 on 2/11/2009. not sure when they received new funds or restructure of debt but by 2/17/2009 the stock traded at a high of .23 and then .43 on 3/18/2009. The stock traded at a 52 week high of 1.88 on 2/14/2011. This stock also have 3.9 BILLION shares outstanding - so the movements aren't as strong; however, you get the picture...
Again - just food for thought... Biotechs are risky - if they receive funding we should see a strong upward gap; however, it all depends on the terms of the new financing. Hopefully current shareholders don't get screwed in the meantime - but since Harry Palmin hasn't sold a single share and the preferred holders converted to common - I do not think that should happen.
Also - one last thing to consider, the daily short %'age (check out my latest daily update) is sky high - that would create such a crazy squeeze that it would be quite beautiful for us longs.
Don't get caught up in the destruction of the price right now - so much shorting going on that it's artificially pushing the price down. I mean if the traders shorting are right - they will walk out making $ but if they're wrong, let the squeeze be on!
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