Starting to look like the expected price rise ahead of the FDA response might have already occurred - two weeks ago.
There might be another, focused around 10/1, but that is cutting it a little close.
I made a nice profit off that rise. I won't be doing another before 10/10. Too risky.
So, what is the next play? Well, it is obvious. I won't be doing it because I don't short stocks (cannot short in a retirement account and my bets with MY money are all longs)... but here it is, with it's rational.....
1. Wait until the FDA responds.
2a. If it is a Yea, wait for the pop and then short the wheels off it.
Because DSCO only had $31 million on 6/30. They will consume 20 to 24 million of that by 12/31... leaving only 7 to 11MM. Add in the next $20MM from the pending Deerfield loan and that only keeps them up to 6/30/14 when they would again have less than one quarter's burn in the bank. Another dilution would be coming... and DSCO likes to get their dilutions over before the annual report comes out... so I would expect a dilution between 11/1 and the middle of the 1st qtr. Last time, when they got approval, they cut the legs out from the shareholders after just a few weeks....look at the charts, you'll see. They won't wait around for a "sale" because they'll tell the shareholders it will put them in "a stronger negotiating position". If it is a yes from the FDA, wait for the pop and short it in the first few days of the pop... don't be too early and miss the pop, and don't wait too long to short and get caught by the dilution announcement... timing would be critical.
2b. If it is a Nay, short the wheels off it...
That plunge won't be the end, it will continue to fall for a short while. Then they will announce a dilution as it falls because they won't be getting that $20MM from Deerfield and by 12/31 the cash will just cover the payables (see above). Again, don'r wait too long to get in... or to cover.