Now is about the time I expect the Deerfield financing to
screw everybody over, hold retailers underwater, and make you think your investment is worthless because of the price action. I'd say keep some dry powder and over the future months be ready to pick some up at bargain prices.
Deerfield bought the warrants for 5.5mm shares at $2.63 and they last for 7 years plus they get the 8.75% interest for $20mm. As recently as mid-November PACB was trading just above a dollar, from there it's risen to $3 in early January. Then, Deerfield strikes their financing on February 5th. Do I suspect Deerfield was shorting at $3.25 in January? Yes. And with the warrants at $2.63 and interest on top of repayment, Deerfield also makes money if they short anywhere above the price at any particular time and remember, they were one of the biggest PACB shareholders before they even did the warrants. So, they have a lot of shorts in this I would figure and were likely trading actively prior to inking the warrants deal. So, they make money going both directions. PACB has what ought to be a huge bright future; Deerfield has the insurance of the warrants, the interest on top of that, a large position previously, and their hedge is where they can have icing on top of all that if/when the price goes down and they collect more cheap shares and/or pocket the difference from buying lower off their higher short hedge. Do I know what Deerfield has been doing ACTUALLY? Of course not. But this is what these types do all the time and they stand to make a lot depending upon whether they sell stock higher than where they bought it or lower from where they ought to have been shorting. Over the long term this shouldn't have a big effect on the price of PACB. I'm very long and love the potential; it's astronomical! But retail doesn't like to see their profits evaporating for very long and the pressure mounts upon somebody underwater and people are emotional and will sell at the bottom just to stop the pain of lost paper profits or paper losses. And the money has to come from somewhere. So Wall street types getcha when yeh can't take the heat and / or when you lose patience. It's always been like that. And I've just been waiting for us to get the big tank put on us.