Replies to post #2575 on Chelsea Therapeutics Intl Ltd fka CHIP

[Nistel]

Agree with you partly as well. However a few things have changed now since yesterday.

1) CHTP is now officially a company with an approved (orphan) drug
2) Company value has increased dramatically because of 1), creating a higher bottom that this stock would trade.
3) Also because of 1) there will always be a buyout speculation.
4) A huge amount of shares has been traded already on these higher levels, thus increasing average PPS firmly. People usually do not buy at 6 to sell at 5...

Taking into account these variables, it would not make sense to fall back into 3's or 4's in my opinion. I would consider current PPS already quite low and likely close to bottom. With as a main reason profit taking after approval news. If selling dries out, no reason to drop much more I believe.

Hey, I can be wrong, but this is how I see it :-)

[Clemsontiger]

Company looking for buyout would be reckless to make that decision based on stock movement 24 hours after approval or at any time for that matter. They would never know if someone else trumps them in buyout, the company may instead partner for royalties, etc.
In mean time, while they wait for stock to drift down, they lose on future revenues.

Buyers value on what patients are there, what is growth rate, what geography, what is competition, what other application for this drug, how much will be prescribed, what price they can collect, what market share they get and bounce that against putting money in treasury bills and make decisions...Using Discounted cash flows, internal rate of return and net present value..

It's not based on where this stock is trading day after approval.