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Arena Pharmaceuticals, Inc. Message Board

  • streetmartianx streetmartianx Nov 25, 2012 6:46 PM Flag

    Fellow Longs, Why are there over 50 million shares short?

    i would like someone to explain this. has anyone seen the bear case enunciated in an intelligent manner. what was the short position before approval. just doesnt make sense. it can't all be attributed to hedge funds being stupid. i dont accept that kind of answer. i am curious to learn if anyone on the board has an insight.
    i have been told by someone in the hedge industry that they don't believe it is a good drug and that the market projections are way overblown. i don't buy that explanation.
    would appreciate your thoughts.

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    • Your sad purpose is to create doubt among retail investors. Have no doubt your unsuccessful here!
      The Answer is as old as the market. IT TAKES MONEY TO MAKE MONEY or in this case IT TAKES SHARES TO MAKE MONEY!!!!!!! Cant't play poker without chips..............

      Sentiment: Strong Buy

      • 1 Reply to longg_player
      • you are wrong on both counts. the message board is to share information and thoughts, not just pump or denigrate a stock or issue glib statements. secondly, the short story is not so simplistic. i have no interest in creating doubts among retail investors. instead, i would like to be more informed and maybe more information would stop retail investors from giving away their shares. i have received some good information in reply to my inquiry and it reinforces my commitment to the stock.

    • IMO you are a soft basher trying to spin people up. So I'd rather just ignore you.

      Sentiment: Strong Buy

    • Short interest will be updated on Tuesday the 27th. Let's wait for the numbers.

    • Several factors. First, they have no product to market yet. Second, Hedge Fund Managers can short an unlimited supply of shares, even shares that don't exist. If you want to see how bad it can be, look at the history of Overstock. They got crushed mercilessly even though there was nothing wrong with the company. The Hedge Funds crushed it because they could.

      The percentage of shares short and ratio of shares short to average daily volume are about the same for almost every early stage bio-pharma company. The shorts have made a lot recently, though when they start to cover - as they need to now - they must do so carefully and slowly so as to not trigger a short squeeze. They need to cover on dips to start reducing their risk because the drug Belviq will come to market sooner or later and when it does, a natural spike will occur. They need to cover before then.

      Someone said it on this board: Every day brings Belviq closer to approval/classification by 1-day and the delays will not continue much longer, so shorts will start covering regularly.

      For those of the school of thought that the drug won't sell well because it isn't as effective as Qsymia, the counter argument is safety, so that is a break-even. Besides, it may work very well for certain circumstances where efficacy could be substantially higher for a subset of patients (e.g. A certain blood type for instance) without the side effects.

      Time will tell but for now the momentum is clearly swinging to the longs side and time will only tell if Belviq will sell.

    • So far, I bet you, 99% of them are down too.

    • They made a very stupid series of bets. As others have mentioned they were wrong about both AdComm and FDA decision. Even if they thought ARNA had a chance at approval they bet that Q would outsell Belviq based on nothing more than the (supposedly) superior efficacy of Q. They were flat wrong about this as well: the efficacy really isn't better and Belviq is very effective at lowering blood glucose while the same can't be said for Q.

      How could they be so stupid? This is a good question. I'm convinced that someone "big" in the industry (someone with a reputation for being right about these sorts of things...someone who might have some people planted high in the FDA or someone who was suspected of having some plants on the payroll) made a negative bet on ARNA and the rest of the lazy losers got wind of it and made the same bet without doing their DD. After all these D-bags all frequent the same bars on Wall Street at 5:15pm everyday.

      Now if we want to get real conspiratorial, we could guess that whoever this big shot was knew that all these clowns were following his bets and betting the same...and that he decided he could make some money by setting them up with false information all while being long on ARNA.

      One thing we know for absolute certain is that The Street and Jim Cramer are hurtin real bad...

    • because its a bio pharm. company. if you were to put your money on a bio company getting approval, more than 50% of the time you'd be right shorting it, but this is already FDA approved which is more than 50% of the battle

    • Look at HFs record on ARNA:
      1. They bet heavily that ARNA would get a negative AdCom vote. They were wrong.
      2. After Adcom, they piled on and bet ARNA would get negative FDA decision. They were wrong again.
      3. They bet Vivus would be the winner and its drug Qsymia is superior than Belviq. Well, last quarter Qsymia sales was $41,000 ! They were wrong again and lost more than 50% of their Vivus investment.

      So, the score between HFs and retail longs has been 0-3 so far with retails won by a landslide. Now, not only retails, big tutes are piling in on ARNA side which is evidenced in 35 million shares added (16.5% of float) just last quarter which amounst to a total of 50% of float. And I bet next quarter report it gonna be more than 60%.
      Judge it for yourself....

      Sentiment: Strong Buy

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