Not sure who the shorts are. I believe that given the low option volume the owners of the 5.5 million warrants may be involved but I have no proof of this. Those owners used to be Deerfield and now are OTA Financial.
The competing long read companies are 10X Genomics and Oxford Nanopore. 10X is using short reads in a more efficient manner (ala Moleculo) but there are still limitations for de novo assembly. Oxford Nanopore currently still has biased errors but the technology is very portable so it has applications in hard to reach places West Africa etc. If/when they address the error bias they will be a threat to PacBio. This is somewhere on the horizon but likely a few years away.
Hunkapillar is an excellent CEO and he owns 1.8 million shares and has 1.2 million options. I wish more CEO took such an interest in their companies.
Sentiment: Strong Buy
I think the large short position is definitely a bet against company viability. The big question for me is who is taking such a large short position at such a low price given the progress that is being made on the Roche deal as well as the continued increase in per unit consumable revenue with the RSII. I truly believe the shorts are wrong on this one but only time will tell.
I think that if/when the company starts to hit the ATM again it will be in 250K-500K increments. Susan Barnes seems to be fairly conservative in raising capital (this may be good or bad depending on how share sales are timed.)
Price movement today was nice but likely manipulation possibly by CF given low volume of 300K.
Based on the conference call comments and the conservative nature of management I think the 3rd milestone is likely coming next month or in the early 4th quarter. It was hinted on the call that the machine should hopefully be available by next July. If completed by July it would still need FDA approval. Not sure if the July timeframe includes FDA approval or if that will add another 6 months or so (I'm sure the shorts know).
Sentiment: Strong Buy
Is there a way to find out who the largest shorts are? It's an unknown company to the general public, unlike for example Blackberry, that I remember reading had a large percentage of shorts awhile back. So I'm guessing it's a few big shorts rather than many individuals. I don't know much about shorting but I've read about the upcoming competition 3X Genomics for example and guess this is the answer to reason they are shorting. Really hope PacBio can pull it off with the long reads and diagnostics equipment. I've got a lot riding on them and was originally encouraged by the CEO's bet on his own company.
Actually having thought more about it, I take what I said back and reiterate it with even further confidence. The company wouldn't ever sell 10m shares at once anyway. They don't even have enough room in their current facility (as of june 30, co. had $28.5m of ATM left, implying 5.14m shares then and 5.86m shares now). This must be a bet against company viability.
I am similarly skeptical of the Cantor upgrade and am wondering how much ATM activity we'll see. The report isn't up on TR yet.
However, I think I have opposite feelings regarding the short interest. I don't really care when the position closes, so long as the stock moves up. So long as I can blame the stock moving down on short interest, I sleep good at night. if the short interest drops but the stock price doesn't strongly rally, I'm skurred. This is too expensive of a short trade to last forever too. What's interesting is that the "unusual" short interest, so to speak, is now exceeding, or is very close to exceed, the amount of shares I think would possibly be sold. 10m more shares, even at today's prices, would add a year to the clock. I think that's definitely enough time for the company to do or die.
Cantor initiated coverage today with a buy rating!
I believe this is good (trying not to be too cynical) it may also indicate that some more of the AMT shares are going to be sold shortly by Cantor; we'll see.
Short interest now up to 14,746,367 up about 580,000 shares. That's the highest in a year and close to double what it was last August. Likely well over a million shares were shorted the first week in August after the earnings announcement, some have covered; I really thought that more would have covered the second week in August. We'll see Sept 10 if the numbers are heading south of 14 million; if not I'll be discouraged; if they don't cover now I'm not sure if they ever will.
On a side note, sad to see that Raindance Technologies pulled it's IPO on Monday (can't blame them given the market conditions). Was looking forward to investing in this interesting company which will be a nice complement to PacBio in the future.
Sentiment: Strong Buy
Only Roche and Pacbio know.
SMRT sequencing will be the advantage and hopefully at a much better price than RSII.
2nd Quarter IO up to 64.2% from 58.15% last quarter.
Largest purchases are by:
CONSONANCE CAPITAL MANAGEMENT LP adding 3,395,890 now at 5,398,861 shares.
MILLENNIUM MANAGEMENT LLC adding 1,275,560 now at 3,444,467 shares.
Largest sale is by DEERFIELD MANAGEMENT CO with sale of 1,562,449 now down to 1,485,861 shares. This is no surprise given the recent sale of the 5.5 million warrants.
Overall the increasing IO is positive and the significant increase by Consonance is interesting. This is a health care fund with just under 1 billion under management. There are currently only 28 companies in it's portfolio so the investment team is likely researching each of them carefully. Following a fund's investments is not usually a good investment strategy but it's nice when a small well run fund's strategy happens to coincide with your own. This fund is also heavily invested in EGRX which has paid off quite well (this is despite the recent hammering of EGRX last week).
Looking for a climb...not sure of the magnitude or timing, but I'm glad I got a few 1000's at 4.21...and the rest at 4.36 and 4.44...seems good and lucky timing to establish new position.
Short interest is flat but at least it's going down. This is the first time since January that it's gone down (albeit by only 98,000 shares)!
I think the shorts are covering since the earnings call but they're taking their time. We'll see how the rest of this week goes.
Relatively flat short interest update for period ending 7/31. Only 4.5m shares have traded since earnings. So lots of shorts outstanding still.
It's not just that per genome cost...its the machine cost and size. The RS II is huge and costs 750K. You can get the genome analyzer for probably under a million and it costs 1K for full human genome. Add some more cost on for the 10K long read technology but it is still well below the cost of the RS II. Plus researchers are risk averse and wanting to plunk down 750K for a machine from a company they aren't sure will be around in a few years is a hard decision for them to make. No one wants to buy the next 454 machine.
So even though the RS is finally getting better chemistry which increases throughput and lowers the costs of the machine, it is too little too late with this new competitor. So i really hope they nail the Dx machine...no real way I can see them succeeding without it. So we await the Q3 update.
share reaction since earnings report is ridiculous. no it wasn't a great quarter, but it wasn't bad either. company is still making progress on all fronts. i'm betting that Hunkapiller soon steps up and buys more stock in the open market, along with other officers.
I think you're right, but I do still wonder what happens when the RSII becomes affordable enough, even if not really cost competitive. Management has stated that by the end of the year, the cost of a platinum de novo human genome will be $12K. Imagine if that's under $10k by next year. It seems to me that a certain segment of the population might just opt for the best sequencing available, regardless of the fact that Illumina and 10X can give them a cheaper sequence. It wouldn't really take many people at all (~10K/year) to justify the current market cap based on consumable revenue alone if you assume at least 1/2 of the cost is consumables and a cost of $12K.
It all comes down to the diagnostic machine. Without that being a hit this stock will go to zero. With a solid entry there it could skyrocket. So place your bets, but dont kid yourself that the "long read" is a difference maker anymore because there is strong competition now from 10x Genomics and it costs less and works off the Illumina machines that most shops have already.
So place your bets on their ability to do something in the Dx space...i sure hope they can cause i own a boatload of this stock and am taking a bath. I did not see the competition coming from 10x...
I have no idea whether they will be able to deliver on the Dx machine..I sure hope so.
Pac Bio RS II System 1EA
UPS, 200/208-240 VAC, 1 Phase 60 Hz, -PB 1EA
On-site Training (3 days) 1EA
Service Contract 5EA
SMRTbell(TM) Template Prep Kit 1.0 270EA
DNA/Polymerase Binding Kit P6 v2 117EA
DNA Sequencing Bundle 4.0 (10 Pack) 90EA
SMRT Cell 8Pac V3 (8 Cells) 575EA
Ampure PB, 5 mLs 135EA
MagBead Kit 90EA
DNA Internal Control Complex (P6) 45EA
Tube Septa (20 Pack) 135EA
Sample Plate Septa 54CASE
Sample Plate 54CASE
Mixing Plate (40 Pack) 72CASE
Pipet Tips (50 Pack) 9CASE