Today's SA Author said:
" I said that I think this company is ultimately worthless. Not that it is going bankrupt this month or next.'
Now if it is as close to a certainty as the author would have you believe that AFFY is TOAST, why would The Brenner Group have gone to all the effort to eliminate AFFY staff, CLEAN UP the balance sheet (100% clean now with only CONTINGENT LEGAL LIABILITIES LEFT, which I have written about several times....NOT A FACTOR UNTIL OMONTYS INVESTIGATION IS OVER!!!), reduce expenses to a trickle ($50 TO $100K PER MONTH) and give AFFYMAX YEARS at the current spend to await the results of Takeda's (now Takeda AND Fresenius) Investigation ? In fact showing preferential treatment to creditors PRE Bankruptcy is against the law and could potentially cost TBG all future business with ANYONE!!! AND they have been sustained through this clean up and continue on under an ultra-low expense model...As the acting President of Affymax (from TBG) said, "why would we go to all that trouble if Bankruptcy was why we are here?"...WES ROSE...but don't believe me...Call Brenner Group and speak with Wes himself.
So why EXACTLY does the author think that they will continue (as per his quote above) if Bankruptcy was inevitable...ANSWER----IT IS FAR FROM INEVITABLE and at current spend rate against reserves they have 7 to 10 years left of life. The author talks about legal costs of those Contingent Liabilities (class action by investors and product liability) but the fact is that right now that is all pretty much just paper being pushed around and NOT BEING LITIGATED ANY TIME SOON (He has slipped up on that point too in prior posts).
He's a master of information contortion, but if you take the time to tear through item by item, line by line and paragraph by paragraph there are grains of truths mixed in with MOUNTAINS OF DECEIT!!! It really is too bad these things never get prosecuted because today's SA Article would be a SLAM DUNK for a conviction!!!
The article was incorrect on many fronts, but where it lost any semblance of credibility is when the author stated the following: The individual we spoke to at Takeda expressed great skepticism in the possibility of Omontys being reintroduced in the United States or elsewhere, and went so far as to say, "Although it's not completely dead, it's going to realistically be very, very difficult for it [Omontys] to come back." Anybody with any experience in IR knows that a statement such as this would never be given to a lone person in the media--ESPECIALLY A BLOGGER!!
Hi Maxdad. I've read your posts on QCOR and this board for quite some time and I rarely post any comments. However, I did post today on the Seeking Alpha article and I want to give my two cents' worth here. When it comes to preferential treatment of creditors, the courts will look back 6 months from the time a company begins wrapping up. There are many factors involved, which include the solvency (or rather insolvency) of the company, the manner in which the payments are made to the creditor (whether made in the normal course of business, for instance), and so forth. If the bankruptcy court determines that a fraudulent preferential payment was made to a creditor, it will require the creditor to turnover the payment to the bankruptcy trustee. Let me tell you, this makes for a very unhappy creditor to say the least. I would be surprised if The Brenner Group would engage in such conduct.
Second, the most troubling thing I read in the article was the alleged admissions made by Takeda. I made a comment regarding this on the Seeking Alpha site, but it hasn't posted yet. In any event, these admissions need to be verified. The author, however, has failed to identify the individual at Takeda who made these admissions. This is very serious. I suspect that most, if not all, investors in AFFY would consider these alleged admissions to be material to their decision to invest or to sell their shares. There exists potential liability on the part of the author if he fraudulently made these allegations. If they are true, then Takeda has opened itself to a potential lawsuit. I suspect that this knee-jerk reaction article to counter EXPstocktrader's article will have long-lasting repercussions.
"Second, the most troubling thing I read in the article was the alleged admissions made by Takeda. I made a comment regarding this on the Seeking Alpha site, but it hasn't posted yet. In any event, these admissions need to be verified."
Me, i wrote early on i doubted the veracity of that. However, i did file a complaint with the sec, against takeda, for disclosure of non-public information. Just in case the recount of the alleged conversation is true. Though i did write in the contingency that in case it's not true my complaint's then aimed at the author of the piece for market manipulation. Just in case someone's sitting around with nothing to do at the sec and may want to take it up as a lark. Other than that, while i think the complaint's justified, probably nothing will come of it.
What I can't seem to understand is... that an article laced with so much obvious malarkey (it's ridiculous) can cause a sell-off and dramatic change in share price. How much of it was long selling, day trader selling, short attacking..? How much of it was stop loss induced? It wouldn't surprise me if there were many stop losses set at different short term support levels based on volatile history. Al the article had to do was induce enough fear to first break 1.85 area, then 1.81 area, then 1.68 area. then 1.60 area. It's like a domino affect.... which in-turn causes more fear selling. Ultimately, I'm not worried. I made my decision many, many months ago based on my own DD and observations and have decided to stay long til the verdict comes. I just hope management handles the verdict properly, whatever it may be.
Hey Maxdad you did nail it because to me it was the most relevant point about shorts thesis. In fact, they changed their main argument by subscribing to what the longs have been saying since the voluntary recall which is it will all come down to the reintroduction of Omontys. In the meantime they are covering at a very fast pace. Shorts are trying to bring the pps down and cover at the same time. Remember people there are only 37 million real shares.