Et's try to stick with the fundamentals and leave the tea leaves analysis to crystal ball operators. Trade ideas crystal ball seems like a cheap model to me.
I understand our nature sometimes causes us all to believe miracles can and do happen but waiting for a miracle is like hoping your number hits the lotto. In real life the percentage players walk away with the spoils.
With Amarin the percentage play is very simple, walk away from the temptation to buy the Reduce-It ticket. Buying that ticket guarantees you lose. To complete Reduce-It, Amarin's only card is current shareholders. To get the funds needed they must sacrifice current shareholders. This is not some complicated math problem. It's very simple. Funds needed can only be acquired by transferring ownership of Amarin to the people who supply those funds. You can have a $5 Amarin or you can gift your share to the funders of Reduce-It. The choice is yours.
As I heard on another lottery-type biotech board, they may be so successful that they'll be forced to partner with a much bigger player just to manage the success, the scale of which will deplete their own resources. That's just wonderful but should this type of optimism form the basis for any rational investment decision?
If I had a capital gain of $1m, I could use a $1M loss in ARWR to save around $350k in taxes (Fed & state).
since this has been a very profitable year in the market, the tax-loss selling in the few losers like ARWR is going to be extreme. I could see the two year low pps ($1.80) being breached.
"I, for one, am not RISKING the LOSS of (potential) income by trying to TIME the market and the news"
The 2 absolutes in life are death and taxes, in the other order one hopes!
There's an important finance principle here:- Never pay taxes on gains you may not realize. Take someone with 100K realized gain and a paper loss of $100K in ARWR. It would be foolish in the extreme to pay taxes on the 100K gain and carry the 100K paper loss into next year. The correct action is to sell ARWR, put the loss against the gain and pay no tax. If, in 30 days time (the wash rule expires), you still feel ARWR is a winner, you can get your shares back and, as a bonus, they'll probably be cheaper then. Win-win situation; hold your ARWR shares and it's a lose-lose proposition.
Well, here's the thing:- My financial adviser was gung-ho to add shares at the $17 level - couldn't lose according to him. At the time I thought the risk too high and told him I'd reconsider when it went to a 24-month low. With small bios like ARWR, there will always be extreme ups and extreme downs. It's built in. Buying the extreme 'up' seemed less sensible to me than buying the extreme 'down'. I'm in at $1.80, or lower, sometime this month provided there's still hope on the drug end.
It would be an extraordinary turnaround if Reduce-It actually worked and the FDA was proved wrong. In 37 years of followed FDA decisions on hundreds of products and never seen such a thing. The percentage player in me says to bet it won't happen but the gambler in me says get the lottery ticket - you can't win if you're not in.
IMHO, the only rational way to play AMRN is through options when the time comes. Buy the cheap leap calls in the knowledge that, like all lottery tickets, the overwhelming odds are that you'll be throwing those tickets in the trash bin once again. On the other hand there is that one in a million chance you won't. Bet accordingly.
Cash has no value when it's sitting on a wood pile with flames approaching. The cash will be long gone by the time the game plays out. Cash in a biotech has no value outside of a takeout.
You could lighten up at these elevated prices and then replace your shares when tax-loss selling kicks in. I assume you've nothing against making money?
It was trading at 79c recently, That's 25% lower. I think this could touch the 25c when many holders recognize their losses for 2014 taxes.
25c represents a 98.5% drop from the most recent high
79c represents a 95.4% drop from the most recent high
From a percentage change perspective, 79c and 25c are actually not far apart.