remember that institutional investor who bought 2.4 million shares(10 Million), they know this stock was below 1.50 six months ago.
I am betting 90% of my capital on this.
So you are presuming the institutional investor knows - or as some have speculated here that APPY management "has given them a quick look" at the results.
My own understanding is that in a blind trial like this one - APPY management really WOULD NOT know how things are going (unless they get verbal feedback from the participating hospitals - or if someone at those hospitals is noting down outcomes).
In contrast the data unblinding agency - the outside contractor who does the blinded trial data collection (and who will be presenting the results to APPY) - MAY have people inside who know.
Many shady "financial" outfits may have links to people inside - so in THAT case that could be a source of information.
Now that is how things may work - where there is a drug - in which case very few people may have access to how the vials were coded (i.e. whether a "drug" was placebo or real) - sometimes there maybe some weakness in hiding and physicians may "know" from the smell or something (though usually they try to hide that). Secondly if the effect is HUGELY helpful, physicians may know also that "this must be the drug". For drugs (like cancer drugs) which have very mild impact (and proof is usually from very careful statistical analysis) this maybe harder to do.
In the case of APPY, the APPYScore is administered to folks in ER - I am not sure if they are doing a APPYScore-like dummy test as well (so folks at hospital don't know what it is), or if the APPYScore results are collected without revealing the test result.
But I do recall APPY mentioning they kept a "blood bank" of the blood samples - this suggests that APPY maybe collecting the samples - and the APPYScore results maybe tested later - in this way there maybe plenty ability to make outcomes secure. That is, they code the blood samples and only one person knows the matching of codes to patient profile etc.
So my guess is that the data maybe secure - and thus "no leak" (but never know).
The institutions who bought may have taken a risk that if it is successful this could skyrocket.
Plus they may have bought put options to protect themselves.
Looking at the open interest for call and put options - there is a preponderance of call options (i.e. slightly more than put options) - which may suggest that these are shorters who are trying to cover for unlimited risk from upside move.
But put options open interest is less than 3000 or so - meaning would only cover 300,000 shares or so (?).
That wouldn't cover the long position for the recent share sale institutional buyers which is bigger than 300,000 shares.
Does this make sense, or is it totally off base here ?
"But put options open interest is less than 3000 or so - meaning would only cover 300,000 shares or so (?).
That wouldn't cover the long position for the recent share sale institutional buyers which is bigger than 300,000 shares"
True, the latest big investors are not anywhere near covered for all their shares (or for any of the other big investors; insiders or outsiders). I think this is a good sign.
I am intrigued by the massive range of risk being taken. I am feeling quite inadequately invested now!
About being nearly or actually 100% invested. Are you guys only thinking of the upside or are you so wealthy that you don't care if you lose most of your capital? It seems to me that APPY was below $1.50 six months ago so it would not be rediculous for it to drop back if things go wrong with the tests. It is $3.50 as I write.
Would it be more prudent to buy a share + put? The anticipation is for results this month so I suppose a June 18 put would be appropriate. A $5.00 June 18 put costs you $2.25 of which $0.75 is risk premium. Suppose instead of buying 100 shares you were to buy 61 shares and 61 puts (same purchase price as 100 shares).
a) 100 shares, cost $350
if price gets to $10 your profit is $1000-$350 = $650
if price drops to $1.50 your profit is $150-350 = -$200
reward/risk = 3.3, potential capital loss 57%
b) 61 shares + 61 $5 June 18 puts, cost $351
if price gets to $10 your profit is $610-$351 = $259
if price drops to $1.50 your loss is $92+$214-$351 = -$46
reward/risk = 5.6, potential capital loss 13%
Using these assumptions and assuming results are out before June 18th, puts improve you reward to risk and, more importantly, protect much more of your capital.
This stock is going to zero. You guys should be a little more diversified than this. The test has very low sensitivity/specificity. Most good tests are in the HIGH 90s, not 90%/50%. It's pretty much worthless when you can do a quick CT scan. Why would anyone bet on this dog?
Try something with some promise.
85%. Yikes. It looks scary now that I right it down. I have been burned hard more than once. This wouldn't be the last time. But I plan on taking some off the table. We'll see what happens.