Several Analysts have given it Target Prices ranging from $9 to $22, yet it is floundering down here below $6. In spite of these high Target Prices AND the fact that insiders have made huge purchases in recent months...it is a heavily shorted stock!! Why such polarization here? Is this simply because there is a lot at stake: where either SNTA will have positive clinical results driving the stock price up wildly, or clinical results will disappoint and the price will plummet? I'm having trouble assessing this stock.
There is no "polarisation" here. Just a lot of shorts who are trying to create a reality and get people like you to believe that the current artificially low price - the result of their willingness to short stupidly en masse to absurd levels - is justified or in some warped universe is actually too high. They are working doubly hard to convince people like you now that after they drove the price to around 4, a billionaire decided to buy millions worth of stock, along with management at higher prices, trapping them (aka short suckers) at a loss. And it can only get worse, as news about positive developments (breast cancer Enchant trial and the publishing of very positive effects on the dramatic impact on reduction of blood vessel development and metastasis) and the upcoming results of trials for other cancers such as colorectal are made public. And anyone who thinks that Kovner and management don't have a view into these upcoming trial results in other cancers are as stupid as the shorts locked in below 5. The PT's above 15 and 20 are all because of the upside for other cancer treatment beyond just lung cancer and breast. But shorts have myopic idiotic views on this stock, and they are going down in flames as we move higher.
And another thing - if someone shorts here on a very short term trade off a big run up, that's understandable. But taking a structural short where you are holding for awhile based on a major catalyst such as an equity dilution or a bad phase 3 or whatever is plain stupid. I have seen loads of these stocks in the same situation. They generally run up in price in the 12 months prior to the release of the phase 3 results. Then they either go higher or crash when the results are announced. Unless something happens in the interim - say a study is stopped because someone dies or gets really sick from the drug - the run up to phase 3 results announcement is almost a given. Now if you are playing a structural short - you think the drug will fail yielding you a complete price collapse - then you enter your short after the run up in price just prior to phase 3 announcement. Not before the run up. Shorts have #$%$ up here, plain and simple.
They have a unique product with a very high probability of receiving phase 3 FDA approval by end of 2014. However, they will need to raise more cash to see it through. Issuing more shares will dilute the value of the stock and the market makers usually price the offering below the market price to insure that they make money. The market maker doesn't care if you make money they only care about them self. Who ever is holding this stock when they offer more shares will be upset and a state of shock may occur, and to add pain to injury they sell their shares and see it explode upward doubling in value in one day.
Funny, this poster seems not to understand the basics. Market makers aren't involved with new equity issuance. They simply help regulate daily trading. Moron. Oh, sorry, the person was being genuinely helpful, pointing out how the company had a drug that would pass phase 3, but pointing out that there would be an issuance below market price. This is called soft bashing, especially the little throw in of the term "market maker" in a misleading manner (because all retailers are trained to think of market makers as all powerful contributors to their doom). And as for a pricing below market price - what's new? The poster would surely like to discourage buying shares now, as the pricing will be below market, but in actuality, the market price may be multiple fold of the current share price now, and the offer on the new issuance may be multiple fold higher also. I wonder about some of the people who post here.