I'm exactly as you: meaning, I have read this article and I'm not sure. from one hand the article is logical and well written. but there anothere side that is obscure. and why that? because this article was written after the FDA approval and not before ! Tell me please ,the facts disclosed in this article are so new to Mr. Steve (the writer)? If he is so naive why he didn't do this long calculation before the approval? why to wait and let this stock climb to $7 before the FDA approval ? Too much questions that he must give a logical answers as well.I think there is a scent of self-interest here ,I state from the article: "I am short PLX. At the time of writing I have various options spreads with combinations of long and short positions." What is that means manipulation ? No? So refer please to the exact definition of the word manipulation written by Investopedia : http://www.investopedia.com/terms/m/manipulation.asp#axzz1tkURTtJp
Yes it's stock manipulation. Just the inverse of pump and dump.
The author is not a financial analyst, but touts numbers to make it sound like he is. As others here have noted, he doesn't know the difference between P/S and P/E. He also does not know that a typical buyout is for 6 X forward sales. Based on his projection for PLX's share of sales of ~$250,000,000 that would value PLX at $1.25 Billion. There's a bunch of other errors in his assumptions and methodology, but I'm not going to waste my time educating the fool.
His profile says he's a Pharmaceutical Chemist. I think that says a lot about his financial acumen.
The author is completely ignoring the fact that a new drug platform was approved for the first time. there are a few big companies that are interested now in cooperating with Plx for producing new drugs that can overcome some patents for major drugs. He is also ignoring any future drugs that are in the pipeline.
i haven't seen such a coordinated bashing and shorting attach for so long. suddenly every one is so negative about this company. check the "BioRunUp" guy twits. he was bullish about the company pumping it hard in the recent weeks and seconds after the approval he started bashing hard the stock (After selling his call options any buying put options), pure and ugly manipulation.. This is how wall street is nowadays.. stock reaction has noting to do with future prospects its all pure manipulations ignited by blogers, annalists, websites and professional shorts.