Then follow your instincts and short it. Or, if you're already short, double up.
Not so long ago, Optimer and Trius had the hot next generation antibiotics. CBST used their cash and cash flow from cubicin to buy them both. While the major pharmas stood on the sidelines and dithered, CBST essentially bought the category. This is definitely worth 100 a share. Perhaps more. And, judging from the posts here, some were bold enough to sit on a short position.
I have a blanket rule which has nothing to do with ABBV: When you're worried as to whether you should sell a holding, sell half and worry half as much.
A more definitive study of Cramer#$%$ was published by Barron's in August of 2007. Their conclusions: 1. Someone was front-running his picks.(i.e. was being tipped ahead of them) 2.The only way to consistently make money on his picks without an advance tip was to trade against them. (i.e. Wait until his followers had piled into a stock and short it, or wait until they had exited and buy it.) Of course, at the time Barron's ran this piece, he still had some clout. After the Bear-Stearns debacle and his on-air dismemberment by Jon Stewart, his credibility was fatally damaged. His record in biotech stocks is particularly dismal. I recall that when Onyx (since acquired by Amgen) got FDA approval for carfilzomib, Cramer went on the air declaring that this would damage Revlimid sales and therefore CELG. CELG dropped 8 points after hours as his followers jumped in to sell or short it. Anyone remotely familiar with the drugs would have realized that carfilzomib's approval would actually be beneficial to revlimid sales, which was borne out when the stock quickly recovered. More recently, even though his ranking biotech analyst on The Street, Adam Feurstein, had dismissed Avanir's drug as "cough medicine", Cramer declined to offer an opinion on Nov.3, saying that he needed to "do some homework". The stock had run up from 6 to 13 since early September, and, in spite of Cramer's nonopinion, was bought out for 17 a share last week. I also note that he did not see the biotech selloff in late February until long after it was underway. As with his misplaced fearmongering on the recent ebola virus scare, he tends to run around shouting "Fire!" long after the fire is out. If you had owned the airlines or cruise lines and taken Cramer's advice to dump them, you would have not only sold at the bottom, but missed the best buying opportunity of the decade.
In my opinion, the secondary was foreseen, inevitable, and very well managed by the underwriters. Contrary to the expectations of many, it did not materially damage the share price. I also think it's obvious that the acquirers are also acquiring the cash position which the secondary produced, and given the direction of the yen vs the dollar, are probably relieved to have translated a depreciating currency into an appreciating one. The BOD are all insured against these kinds of lawsuits nowadays and the same old roster of law firms which file the suits are just trying to extract a few bucks from the insurance companies to go away. If any of these suits are successful, you will receive a thick sheaf of papers which will take you an hour to fill out, after which you will be paid a penny a share settlement. Most, like myself, will toss the forms in the trash and let these law firms walk away with our pennies.
The fact that the majority of posts here seem to be shorts trying to construe bad news demonstrates how little retail ownership this stock has. The approval, asyou say, is a foregone conclusion.
The NYT article does not say that "talks could still break up", although that is alwys a possibility. If they get a better offer. You weren't short this one, were you?
I am long CBST, but, unhappily not nearly as long as I once was. It seemed to me that they had essentially bought up all the promising superantibiotics, but the stock was going nowhere. There's certainly nothing in the chart to suggest that this news was leaked.
I was amazed to learn that this overamped lunatic is still milking "The Street" for lavish salaries, bonuses, perks, etc., even though he does absolutely nothing for them and they are an abject failure. As for his "charitable trust", I have always suspected that he has his relatives on the payroll at hefty salaries. A prime example of the mistaken New York City belief that if you talk very fast, you must have a lot of information to impart. It's embarrassing and painful to watch David Faber, an intelligent man who obviously disdains Cramer, forced to flatter him and defer to him.
A lot of the posters here are into technical analysis and charting and will no doubt have strong opinions on the "turn". I added some shares today, but still have only half my original position in the IRA. It seemed evident to me that when it was flatlined at 105, someone was selling/shorting it there. I look to the topping out of ABBV as a good tell for stability, but perhaps not for a return to 110 right away. I would not be surprised to see it fall back to 103.50. I don't think 110+ is in the cards until we see how the ABBV approva/rollout goes. My personal opinion is that they will be aggressive in pricing but that it won't matter. I think they have a lot of bluster and bravado, but that GILD is capable of better execution.
I'm not sure that I held it long enough to harvest the dividend. However, if I had, I'm sure that the French would have taken a cut. I don't own any European stocks at the moment, and I think I'd need to see some real action from the M. Draghi, rather than just vague statements of possible intent before I'd go there. Actually, if Europe were to show signs of revival, I think I'd just buy Ford. Good luck with CLMT.
I think a lot of people were waiting for a signal that the selling had stopped and the JPM note provided that signal. Cramer, as usual, was just running with the trend. If he'd made his remarks yesterday, I would be impressed. And frankly, I don't think he has the credibility to move a stock this big. He made his now tarnished reputation during the tech craze when he would pump some tiny small cap stock after hours and it would jump two points immediately. The Bear Stearns debacle destroyed his credibility for most. Lately, he was cheerleading the ebola hysteria and warning everyone away from airlines, cruise lines, etc. at precisely the moment you should have been buying them. A week or so later, after they'd made huge gains, he did a 180. Let's face it, if you met this wildeyed babbling guy in a bus terminal,you'd assume that he was on speed.
TOT is the French Exxon, one of the European bellwether stocks, now trading near a 52 week low. I once bought it after the price fell when one of their North Sea gas wells sprang a leak. With a market cap of over $125 billion, I think they're a little out of CLMT's league.
Yes, my assumption is that while the cost of feedstock drops, the prices of the finished specialty lubricants do not change that much. First, there are not that many competitors in the field; second, even if prices drop, the American producers of these products will be at an advantage. One could even foresee a strong export market for some of them. The fact that this has recovered over the past two sessions even while crude prices continue to trend down suggests that I am not alone in this belief.
PS Even more to the point, during that same period from mid October to yesterday, ABBV went from 53.50 to 69. While many here sat transfixed, reassuring themselves that ABBV was no threat, the market was revaluing the two stocks, much to the advantage of ABBV. After I got past my denial, I hedged my GILD with ABBV at 63.75. If I hadn't been watching GILD so closely, I could have gotten in earlier.
One of the consequences of being overinvested in one or two stocks is that you tend to become mesmerized by them and miss seeing the other opportunities in the market. During the month or so (10/31 to 12/04) that GILD was falling from a high of 116.83 to 100, AAL went from 41 to 50, GM went from 31 to 34, NCLH went from 37 to 45, and AAPL went from 107 to 116. I cite these because they were not sudden bounces, but continuations of well established trends. If you go back a couple of weeks to 10/13, you could have bought AAL for 28, GM for 30, NCLH for 31, and AAPL for 100. In other words, you don't have to be a genius, you just have to pay attention.
Well, in that case, I can point out what poor decisions you have made without trying to spare your feelings. First of all, putting 90% of your liquid assets into any one stock is foolish. When you announced that you were doing this ahead of earnings, with the stock at 110, you explained that if the stock went down 10 points, you would put the remaining 10% of your assets into it. This makes absolutely no sense; if you were really contemplating the possibility of a 10% drop, why would you bet the farm on GILD in the first place? When the stock went up over 114, you spurned my suggestion that you take half off the table and wait for a better entry point after a possible sell-on-the-news drop. That decision cost you a $20,000 profit. At least. Then, assuming that you still had absolute faith in this stock, you missed the opportunity to reestablish your position at a lower price. (I sold all the GILD in my IRA at an average price of 112.80, and, after several fumbled attempts to reenter, now have half my old position at an average price of 101.80. I still have all of my original shares in my taxable accounts.) Yes, yes, I know that your house is paid for and that your wife has a good job. But, at this point, you're down about $50,000 on this investment when, with even a modicum of caution, you could have been at least even. I would suggest that, like many physicians, you are nowhere near as smart as you think and rather pigheaded. (I would have been less blunt if I thought you were going to read this.)
During the most recent quarter, Distributable Cash Flow was $71.3 million. At $2.74, they only paid out $52.5 million in dividends. They are coming off an acquisition, a major maintenance cycle in their refineries, and the construction of a new refinery in North Dakota. There will be plenty of income to pay the dividend and pay down debt as well.