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Stadion Tactical Growth I Message Board

astuteinvestor1 13 posts  |  Last Activity: Sep 18, 2014 11:36 AM Member since: Jul 6, 2014
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  • Reply to

    PDLI Statement Given

    by ducktown10 Sep 18, 2014 9:48 AM
    astuteinvestor1 astuteinvestor1 Sep 18, 2014 11:36 AM Flag

    I agree with your synopsis. My wife used to work at E&Y and I got her take on the situation. Here are our collective thoughts:

    (1) The company should not have been "surprised" that E&Y resigned suddenly (I'm guessing this has been building for awhile). If management was in fact surprised, then the CFO should be fired for poorly managing the relationship with its external auditor.

    (2) Companies like PDLI present significantly more audit challenges than a traditional manufacturing or service company especially with the introduction of fair value accounting. E&Y could probably find other auditing opportunities that are more profitable (less time & higher fee).

    (3) E&Y's audit-related fees went from $366,000 in fiscal 2012 to $958,000 in fiscal 2013, an increase of 161.7%! It makes me wonder whether E&Y has wanted to exit the PDLI relationship for awhile and the starting point was a sharp YoY increase in the audit fee.

    (4) It might have come down to a simple personality conflict. I'm guessing that the PDLI management team is not an easy date (e.g., constantly involved in litigation with their partners) and maybe E&Y got tired if the audit process was an ongoing battle.

    I'm not sure all of the above merits a 20% decline in the stock price. I was always a little surprised that PDLI got a Big Four accounting firm to audit the company and it will be interesting to see if they can get another Big Four firm to step-in for E&Y. I'm guessing they will have to go with a 2nd tier audit firm going forward.

  • Reply to

    ETRM now DOWN off allegedly "positive" JAMA mention

    by oozhe22 Sep 3, 2014 10:57 AM
    astuteinvestor1 astuteinvestor1 Sep 4, 2014 4:38 PM Flag

    As a M&A banker, I was involved in transactions across a broad array of industries which required an ability to understand the industry specific drivers of valuation. The depth of the valuation analysis in M&A goes WAY beyond the #$%$ that the majority of research analysts create. My subsequent 10-years on the buyside as a research analyst with a CFA charter provides me with the tools to evaluate the quality of an investment thesis. Just because you have 18-years of small-cap biotech investing experience plus your work in clinical-trial analysis does NOT automatically mean you are a successful investor. To me, one of the key tenets of generating attractive risk-adjusted returns is understanding the bear-case (when you're long) and the bull-case (when your short).

    I currently manage a small investment partnership. We view ETRM has highly speculative so our long position represents less than 1% of our total portfolio. We think ETRM provides interesting optionality on the obesity space and our adjusted cost basis is about $0.75 (after various put & call transactions). Worst case - ETRM bumbles along and we exit at breakeven. Best case - the stock goes to $4.00 post approval and we are ex-dividend.

    Thanks for not sharing your vast "Wall Street" experience. In the interim, I looked for you on Brokercheck and found nothing. Therefore, I assume you never worked for a registered broker-dealer or you've been "retired" for more than 10-years.

  • Reply to

    ETRM now DOWN off allegedly "positive" JAMA mention

    by oozhe22 Sep 3, 2014 10:57 AM
    astuteinvestor1 astuteinvestor1 Sep 4, 2014 3:24 PM Flag

    As someone who spent 18 years as a M&A banker, your "analysis" is average at best. Even the one-eyed man is king in the land of the blind when you elect to measure the quality of your analysis against the chuckleheads who post on SA and the Yahoo message boards. Your biography on SA doesn't imply much "Wall Street" experience. Where did you work and in what capacity?

    For what it's worth, I was approached by the editors at SA about becoming a Pro Contributor. It was an easy decision to say no immediately. It would have gotten in the way of my day job and the pay is negligible vis-a-vis our AGI.

  • Reply to

    ETRM now DOWN off allegedly "positive" JAMA mention

    by oozhe22 Sep 3, 2014 10:57 AM
    astuteinvestor1 astuteinvestor1 Sep 4, 2014 2:16 PM Flag

    That's why I've been a SA PRO (paid side) analyst and none of you are. Anybody can get themselves posted as a contributor on the free side. And the managing editor reached out to me (not me to SA) expressly off the strength of my ETRM posting specifically.

    Compensation for even SA PRO analysts is chump-change.

    $100 for regular "Pro" articles and $500 for "alpha-rich" Pro articles. So 10 published "articles" equals $1,000 - $5,000 of pre-tax compensation to the author?

    If you were a real analyst with a long-term, proven track record, you would be at a hedge fund making at least $500k annually.

  • astuteinvestor1 astuteinvestor1 Sep 4, 2014 8:15 AM Flag

    I'm sure it's difficult being the conscience of investors everywhere. However, if you were really a person with value-added knowledge, you would be working directly with institutional investors and not jerking yourself off with dumb money retail on SA and the numb-nuts on the Yahoo message boards.

  • Reply to

    Volume Spike

    by astuteinvestor1 Sep 2, 2014 5:05 PM
    astuteinvestor1 astuteinvestor1 Sep 3, 2014 4:36 PM Flag

    Fair enough, but today's stock action makes me feel more confident in my prediction that there will be no buyout nor a special dividend anytime soon. Currently, I am short the $10.00 NOV 2014 calls and would be quite comfortable having my stock called away at that price given my average cost basis of $4.85 while capturing 15 quarters worth of dividend payments.

    Bon chance!

  • Reply to

    Volume Spike

    by astuteinvestor1 Sep 2, 2014 5:05 PM
    astuteinvestor1 astuteinvestor1 Sep 3, 2014 7:56 AM Flag


  • Reply to

    Volume Spike

    by astuteinvestor1 Sep 2, 2014 5:05 PM
    astuteinvestor1 astuteinvestor1 Sep 3, 2014 7:55 AM Flag

    No & No

  • astuteinvestor1 by astuteinvestor1 Sep 2, 2014 5:05 PM Flag

    The stock goes parabolic with over a million shares traded in the final 3 minutes of the trading day. I assume most, if not all, of the volume was attributed to short covering with PDLI trading ex-dividend tomorrow. Yes, it's a new 52-week high, but the previous 52-week high of $10.21 last December didn't even last a day.

  • astuteinvestor1 astuteinvestor1 Aug 13, 2014 4:49 PM Flag

    Yep, no need to book the loss early if the buyer is long the contract (I still believe it was a call seller).

  • astuteinvestor1 astuteinvestor1 Aug 12, 2014 10:30 PM Flag

    adeflig: You are formulating a hypothesis based on faulty data (see my post above). Those 109 contracts for the September $2.00 calls traded weeks ago @ $0.08. I'm guessing that volume was on the bid side and not at the ask. If you go to the NASDAQ website, you will see there was no trading volume today in any of the ETRM option contracts for September 2014. Unfortunately, the $80,000 potential return you cited is more likely to be a loss of $872.

  • astuteinvestor1 astuteinvestor1 Aug 12, 2014 10:18 PM Flag

    gianni_urgentsolutions: The volume in the ETRM August calls that you and others have cited did not take place today, but actually many weeks ago. As we all know, Yahoo! Finance is a free site so you get what you pay for with respect to the data. Trading volume for options does not update on a daily basis, but only when new trades occur (e.g. if 100 contracts traded 20 days ago, that 100 contract volume will show up each day in the Yahoo! Finance data until another trade actually takes place). If you go to the NASDAQ website, you will see that there was no volume today in any of the ETRM August 2014 call option contracts. It's almost a certainty that the $2.50 calls, $5.00 calls and $7.50 calls will expire worthless in three days so it's understandable why there was no trading volumes in these contracts today (i.e. no need to cover if you are short, well out of the money if you are long).

  • Reply to


    by adeiflig Jul 29, 2014 11:21 AM
    astuteinvestor1 astuteinvestor1 Jul 29, 2014 12:19 PM Flag

    Good thing he didn't take your previous advice of buying well north of $2.00.

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