Let's think about this, has there ever been a hedge fund who bought into a stock, and the day the offering was announced, it went down below the price they paid, and it NEVER went back up above that price? I highly doubt it's ever happened, and if it has, it would have had to have been an Enron type disaster scenario, in other words a one in a million type of deal.
So what does this tell you? Even if you hate ONCS as a company and hate their technology, you'd be an absolute fool not to call this a table pounding buy right now. If you buy shares at today's closing price, you have a 17% return JUST TO GET BACK to the price that a hedge fund just plopped down $16M at.
The last couple of months have not produced the PPS rise that we expected, mainly because of this offering. But folks, whether you are a long term investor, or a short-term trader, you are presented here with what is literally as close to free money as one can get. I have been re-allocating assets for the last two weeks to make sure I take advantage of this, and I've increased my position by close to 50% and will continue to add at these prices as long as they last. It might be 2-3 months, it might be a 2-3 days, but I can say with 99.99% certainty and it should be obvious to you all as well, that if you buy ONCS right now you are all but assured a 17% gain in the fairly near future. I believe you're gains before year-end at these prices will be more like 300%, but I'm willing to guarantee you 17%.
It doesn't get any easier than this folks, if you're too stupid to see it, I feel for you.
Sentiment: Strong Buy
When a company puts out money like that directly into another company, they like have a key to the executive wash room. They are placing a bet long term with that much money. They get hit with only a 20% tax rate going long. They stand to make more that way. Short term they get hit like 35% or so. We are just looking at federal tax and the state will exact it's pound of flesh too. Long term investors expect a stock to vacillate over time but essentially work its way higher and higher. Your view obviously is short term negative and way off the mark. You don't seem to know what a hedge fund really is. Your should learn the difference between index funds, hedge funds, ETF's, and mutual funds to name a few. Institutional investors are basically this, a company, any company, buys a large block of stock in another company and holds it. I am trying to enlighten you and not bash you. You see the value of Oncs, so does the institutional investor. That investment diluted the stock's market cap which if the stock is good long term, it will disappear and the stock will trade higher another day down the road. What most of you don't realize that that investor added book value to your shares. Your shares are ownership in Oncs and it increased the equity in your shares when that institution plunked out a net of 14M bucks to stockholders' equity on the balance sheet. Your share value went up on the books of Oncosec. Oncs has more go power now. Look at the future and not the present.
Whoever bot in at .71 must not have a care in the world with their investment. Volume has dried up so much we would be seeing them adding on the cheap as we all are, but seems they're sitting pat holding the info we don't have yet and lighting up Cohibas. It must be a very strong hand...
Sentiment: Strong Buy
sage, I doubt its a matter of them having info we don#$%$ they have access to resources we do not. Like paying $100k for a scientist to review ONCS and give them an opinion.
I'll bet you (though there's no way to prove it) that they did in fact add at these levels. Not talking doubling, but maybe added another 5-10% to their already substantial investment.
Things are going to be turning good soon.
You are about right in your assessment but you place to much emphasis on the new issue of stock as the price suppressant. I get more of a intuitive feel that the Oncs market has more of a short term bias that that failed to get upward traction. This stock floated around at lower levels longer than it is now for a long time without the so called dilution. It is up as high as it is well over the past since I think more true investors are taking shares out of market play, fewer traders in other words. But right now the traders aren't buying but selling or waiting for another pump and dump opportunity. Markets strike me as vacillating between rational and irrational behave all the time and in the final analysis maybe we are only right a little bit of the time but basically are victims of the whims of the market. The market mavens right now seem to be building a base and knowing the significance of the oncology Oncs is developing, it seems as you said 99.99% upside potential is going to occur somewhat near term. As an accountant, accounting principles define long term as more than a year and short term less than a year. We have a nice increase in share price coming short term of around 100-200% from the current level; 99.99% sure unless I just jinx it.
I love the theory, Sal, but you know what Jerry McGuire said. "Show me the money." And ONCS has yet to do that. I have a substantial position and I can wait. It's just that I would rather not wait. I want instant gratification. When I was young, I had lots of first dates, not so many second....hmmm.
Just off the top of my head:
DNDN had an offering in 2011 at over $50 per share, the pps is at $2 now.
ADLS had an offering, the stock is practically extinct now, same with DDSS and BPAX.
VICL and CLSN had offerings, those stocks are dead now.
vicl didnt die because of an offering, nor did dndn. oncs did not do an offering because it was a last resort. this isn a sign for the end times. most micro cap biotechs go through offerings and dillution. plenty have done very well - eltp diluted all the way t 500 million oustanding shares and went from .07 a share to .90+!
And your theory is also assuming that this is simply a hedge fund play, not an institutional "investment", which is completely contradictory to what the CEO just said when he mentioned "highly respected biotech institutional investors".
Again, terrible examples. I'm not talking about 3 years from now. I'm telling people that have a GUARANTEED 17% gain in the near future. I'm looking for examples where the PPS dropped below offering price SAME DAY and NEVER EVER EVER EVER rose above that price again. Until you find me an example I'll continue to call you stupid.
You are quite naive. Hedgies never loses money on offerings. In fact, it's guaranteed easy money to beef up their returns.
How the game is played on Wall Street:
ONCS goes to an underwriter (placement agent) to raise $16M.
The underwriter shops the deal (offering the shares to his hedgie buddies).
This occurs weeks before the deal is finalized and announced.
The hedgies know that the offering will be at at a specified discount to the closing price on the date the deal is announced.
So they have a few weeks to start selling short, knowing that whatever the pps is pushed down to, the price of the offering will be 10% or 15% or some agreed to discount to the pps on the date the offering is announced.
They sell short with impunity.
The pps was in the high .70s to .90 before the offering. So they sold short the bulk of the shares in that range and then covered with the .71 shares in the offering.
A 15% return for a few weeks work of screwing the baggies is a 200% annualized no risk return.
These offerings are highly prized and only the underwriters best buds get them.
If the hedgies weren't able to sell short the full allotment of their shares before the offering announcement, they would sell the small balance of shares at below the offering price and still net a profit on their total position.
They really don't want to be holding any ONCS shares and are willing to reduce their gains to be out completely.
That is why you generally see a stock drop below the offering price.
The hedgies are gone. For the trouble of having to ream the shareholders, they receive a parting gift, millions of freebie warrants.
Quote from Punit from article OncoSec Medical Issues Annual Letter To Shareholders
"The latest cash raise was the largest financing in company history and involved highly respected institutional biotechnology investors."
He does not say we sold to hedgies who shorted the stock and scr$wed shareholders.
Sentiment: Strong Buy
Show me one instance where a hedge fund bought 10% of a company at a certain price, it dropped below, only to NEVER hit that price again. Please accept the challenge. There may be examples, smart guys like you should be able to find them. Until you do you are completely missing my point and you shut your f** ggin mouth.
Interesting thesis, but based on fantasy. You see, well managed portfolios have more than ONE position in them, and they are managed.....meaning buying, selling and hedging. At some point, losers are discarded. Thats why a good portfolio is diversified, even within one segment. Usually investors in secondary offerings are presented with an investment opportunity, so this investor(s) feels that this investment is worth the risk....with the caveat that nothing is certain. DUHHHHHHHHHHHHHH LOL
The real thesis is: Is ONCS a buy at these levels? I am long and will only add under 50 cents if it gets there. My thesis is phase II positive results and the potential of a partnership. To me that is the real value in this stock.
I get all that, but my point is simply that you can buy 17% below what a hedge fund just bought at right now. And I can guarantee you that we will at a minimum get back to 0.71, likely soon. Show me an example of a company where a fund bought in and the price dropped below that same day and NEVER went back above their buy-in price. Just find me one. If you do I'll shut up.