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Exelixis, Inc. Message Board

  • mfdttc mfdttc Jan 18, 2013 1:24 PM Flag

    Anybody can speculate

    on what is the reason for the weakness of share price? I see no negative news at all.

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    • While the HEDGE FUND LACKEYS are hard at work on this board pounding the table as to why Joe Q. Sixpack should be buying (when in reality the hedge fund is SHORTING), people remain clueless as to why the short interest keeps climbing and they continue to take the bait of the hedge fund lackeys ("i.e. "buysignalinvestments"). A 5 year old can understand why EXEL cannot and will not move higher for the foreseeable other words, it will remain "dead money":

      "This deal is very similar to an equity offering with warrants attached. It's just a pig with a different type of lipstick. Warrants are "sweeteners" in financing deals. In the case of the Exelixis financing, the convertible arm was a "sweetener" in lieu of warrants. Why are they called "sweeteners"? Because an investor can use the common equity portion of the deal to finance a portion or all of the warrants/convertible arm.

      In the case of common equity and warrant deals, you'll often see a fund take down, let's say, 5 million shares of XYZ common stock, and, also be apportioned 0.5 warrants for every common share. Oftentimes, a few weeks later, when the 13F filings come out at the end of the quarter, you'll notice that very same fund owns absolutely no shares of the common stock, despite the stock having barely moved. How is this possible? Because the fund likely used the common shares in a short position to pay for the warrants, making the warrant arm of the trade almost risk-free, or reduce the cost of the warrants greatly.

      Let's take a closer look at what investors in the Exelixis financing are likely doing: A hedge fund buys Exelixis common stock, in size, at $4.25 per share and has the ability to own more stock at $5.31 per share at some point in the future with the convertible arm. Therefore, any time Exelixis' stock price rises above $4.25 by a reasonable amount, the hedge fund can short the stock and use profits from that short sale to pay for the convertible stock.

      For instance, days, weeks or months later, if Exelixis' stock is trading at $5.50 and the hedge fund bought 10 million shares in the financing deal, it could short 10 million shares and "arbitrage" the profits. [Since the hedge fund owns 10 million shares at $4.25, it profits from the cost basis of the short versus its long position received in the deal at $4.25.] The fund then takes those profits and uses them to pay for the convertible arm in full, or reduces the cost basis of the convertible.

      Why do this? Easy, it's almost like free money. Furthermore, if an investor thinks Exelixis' cancer drug cabozantinib is going to be a billion-dollar blockbuster drug, then owning the stock at $5.31 -- or lower, cost-basis adjusted -- is a no brainer. And, if investors can get convertible shares for free, it's even better.

      When a company raises money through an equity sale with warrant or convertible notes as a sweetener, investors who aren't lucky enough to participate should run away from the stock - fast."

      • 5 Replies to stockmaven888
      • "....are hard at work on this board pounding the table...." Let's add pounding the table with multiple ID's. Who resembles that observation???? Why that would be yourself and your isomeric (thx) alter ego Buysignal. Let's add pounding the table with multiple ID's and spouting misinformation and gross exaggeration. Who does that describe??? Scratching your collective heads?? Let me help, that would be the polycephalic creature Nomadbuysignal providing the yin and yang countermessages to help we helpless and befuddled Joe Sixpacks with out investment choices. How's that ARQL double down working out?

      • I am not sure institutions that are offered common shares alongwith convertibles in a company financing deal are allowed to short their common holding. Also, I am not sure the same institution which is a part of the financing deal and independently owns common shares can short its independently held common shares to transfer the profits to convertibles! There are restrictions doing this per securities regulations and contract conditions. Somebody on this board comes up with this "brilliant" idea the shorting concept for explaining why Exel shares are rangebound now and why it has 28% of the float shorted; but, those who know what restrictions these deals incorporate would be laughing at this superficial (perhaps, stupid) argument!!!

        I ask readers of posts on this board to be judicious to whatever is posted on this board by so-called self-appointed pundits.

      • Let me figure this out. Nomad is buysignal and stockmaven is beststocks while ernie is myurog and myurog is nomad and stockmaven is buysignal and they are all alias names of enabeler and shortsupshyte. Mommy said there would be days like this! If Nomad and stockmaven both work for a hedge fund owned by erniewerner, that meaning beststocks is an uncle of shortsupshyte who is the son of jvictor. They are all short the stock having decided to post both long and short messages, because all of them are bi. and that way it only seems fitting. I got it. Its all clear to me now! As contrary investors then, you should all be long!

        Sentiment: Strong Buy

      • "A 5 year old can understand why EXEL....", so you are here to educate us long and give us a lesion like pro? I have more than 5 year old brain and still can not put all these turds together of what you just talk about!
        After all these garbage, you conclude " SHOULD RUN AWAY FROM THE STOCK-FAST". This is the most stupid conclusion that I have ever seen. Listen, how I want to spend my own money is not your business, stockparven888. Don't tell me "SHOULD" if you may.

      • A complete crock of shyte from nomad aka Stockmaven. If the "Hedge Fund" is continuing to short as he states, and covered, it is great. One day he says, its the Private Placement holder covering his position, next its a hedge fund short 40 million shares. I hope he is right about the hedge fund, as we will see one of the biggest short squeezes ever, if that is the case. Yesterday it was the hedge fund today it is the private placement holder. In any case, time is not on their side, if that is true, its on the longs side, as where exactly does he think they are EVER going to find the 40 million shares, if naked short, or if hedging then all the shares they have in effect are already sold. Who cares about that, it is great for all longs, as that means no overhanging position to sell later. The good news just keeps on coming. Conveniently forgets to mention this obvious fact.
        As for a buyout? Do you think ROCHE or GENENTECH are going away? They just announced they are moving forward on Phase 3 of another potential blockbuster. How about the CABO FRANCHISE, think that is going anywhere, but producing more and more revenue and expanded applications? The B + S artists here folks, is NOMAD and Stockmaven and their various other names. Who in reality is probably the very person he says he is not. What is that? A guy hired to try and keep folks from buying, and get some to sell. Think about it clearly, He argues that the long touters are actually short representatives of some mythical hedge fund, beyond the one he likely works for. It is such a convoluted theory. They clearly say they are long, and he says they are short. Does that actually make ANY SENSE at all???? So I suppose those saying they are short, are thus long?
        Buy, accumulate and hold. The trading games are going to get crushed and the value will overwhelm any real shorts, if not already covered, as would be the case of the Private Placement theory. BUT, do not forget, that either way, either somebody has to cover big time, OR stock that overhung the market, is in effect already sold. It IS the MOST IMPORTANT POINT.
        Forget the petty stuff about who is who, who posts under what names. THINK about why on good news and up market days the shorts are so desperate to keep the price down. Then look at the unfolding story and draw your own conclusions. I say clearly: this is going up for long term investors, and for traders, play it as you like. I do both! But understand where the odds are in terms of long term growth and share price. Way higher. So get fooled out if you like, but blame nobody but yourselves if you miss the huge run up when it happens.IMO

        Sentiment: Strong Buy

    • When do "speculations" actually pay big? Is it when a stock is expensive and you buy there? Or, is it when it is cheap? Some never ever learn this simple reality. Buy this when its cheap. Forget the penny moves, this will move up dollars. But wait and buy it expensive, so you then can moan about that, and say it is all a conspiracy. Nobody is stopping anyone from accumulating shares here. Do it or miss.IMO

      Sentiment: Strong Buy

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