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Tessera Technologies Inc. Message Board

jacosa 125 posts  |  Last Activity: Mar 5, 2015 12:51 AM Member since: Jan 24, 2000
  • Reply to

    big move in pcyc ah

    by maddison3 Mar 4, 2015 4:08 PM
    jacosa jacosa Mar 5, 2015 12:51 AM Flag

    I don't think you'd even get a majority of Incyte shares tendered at $140. And J&J will confirm now that you don't want to offer only enough to get the shares, you want to shut out other bidders (in the case of Incyte, you also want management to make nice about the deal, and that would put the price even higher). Everyone on OUR side of the court expects Bari and at least one of the solid tumor candidates to go the distance, which roughly triples peak earnings.

  • jacosa jacosa Mar 5, 2015 12:35 AM Flag

    If you like what the monkey says, check in with the organ grinder (author is Lawrence G. McMillan; lots of investment sites give a discount on the book) The only time I ever used a REALLY complex option strategy (a condor), it failed (I expected a roughly $20 move in response to a binary event but the actual move was about $45) There are fairly frequent opportunities to hedge against whole-market or sector trends with spreads against indices or index ETFs.

    Last point: we're in that strange interval when the longest available LEAP runs less than 365 days, so they're more like regular options.

  • jacosa jacosa Mar 4, 2015 8:13 PM Flag

    And by the way, a synthetic short is also useful to an institutional investor who has a large over-allocation in a particular stock and wants to reduce it gradually (with highly skilled trading, for example) but wants to reduce exposure quickly. Market reaction to the large synthetic short position tends to be much less than it would be to an actual block being sold.

  • jacosa jacosa Mar 4, 2015 7:49 PM Flag

    This makes the most sense as part of a "synthetic short" (buy a put and sell a call). If you are bearish, but concerned about a low probability of an event that would drive the stock price higher, you have more flexibility in dealing with it than you would with an actual short sale. Another multi-option strategy that's rarely used with stocks (much more often with index surrogates) is to buy an in-the-money put and sell a less in-the-money one. Put prices tend to approach cash value earlier in expiration week than call prices do (no particular reason) so this is a relatively un-thrilling way to milk a bit off a fading stock. Browsing my trusty copy of "Optoins as a Strategic Investment, I find several other reasons one might buy in-the-money puts (it is amusing that some of the most popular multi-option strategies get discussions that amount to "Don't, just don't.").

    Really, the only put strategies that retail investors commonly use are buy or sell of a put. For the rest, it's professional operations, so you have to consider pairings with repos, converts and other strange creatures.

    Remember "good TJ's" point that Incyte's assets are largely intangible, and my point that a fundamentally meaningless event could dominate institutional "thinking" about Incyte until the next actual news (remember the "bad conference call?")

  • Reply to

    March INCY Forecast

    by bonkenx Feb 27, 2015 6:06 PM
    jacosa jacosa Mar 3, 2015 11:25 AM Flag

    In a market where 3% APR wakes people up, 20% with low risk is at least worth a look. Typical seasonal behavior between now and June is dull anyway.

  • Reply to

    March INCY Forecast

    by bonkenx Feb 27, 2015 6:06 PM
    jacosa jacosa Mar 2, 2015 4:53 PM Flag

    Should be able to buy a Jun 70 and sell a Jun 80 at a debit under $8. If it hits pre-expiration Wednesday it ought to come off for $8.50-9. That's one example. Should net 20% APR (close enough to 60 cents on $8 at risk for 4 months) if INCY doesn't move much. Back in the '90s I used to do a lot of this with Intel (stock with strong upside bias and few dramatic moves).

  • Reply to

    March INCY Forecast

    by bonkenx Feb 27, 2015 6:06 PM
    jacosa jacosa Mar 2, 2015 1:34 PM Flag

    There are some interesting possibilities for what I call a "synthetic junk bond" in Incyte going to June. Buy a Jun call, sell a higher strike Jun call, both in the money. Hope to close both positions on the last day. DO analyze return with a view toward response to 'events.' But in general, it isn't hard to get 20% APR with low risk.

  • jacosa jacosa Feb 26, 2015 9:03 AM Flag

    Bonk has it. I'm no longer overextended, but have been and will be. I had bought some stock and sold $60 (slightly out-of-the-money) calls against both the new stock and some existing holdings. The stock rallied quickly to around 70 and I rolled the calls to $70 and extended them to the Jan 2016 expiration. I would have preferred to roll the calls upward again, but the market that far out isn't especially liquid. So I bought back the whole batch of calls and sold the stock I had bought new when I had sold the calls. I made enough of a profit on the stock to cover the loss on the calls and to pay for some MYGN (even as we speak, shorts are being squeezed in MYGN. Some of them may be stubborn enough to generate a price spike in a few months).

    Overall, not a pretty operation, but I would have been too exposed for my taste without the options.

  • According to the NASDAQ site, short interest in Myriad has dropped by 5 days' trading volume (about 20%) in the last 10 trading days. Looks like more buying-to-cover demand than the market can satisfy without a price change; that is, a squeeze. The next question is how much of that remaining short interest is already in the process of being covered by skilled traders (and is thus unlikely to lead to a disorderly market). Question after that is how much short interest is in stubborn hands--any more than a week of residual short interest could cause a price spike on good earnings news. Final question is how the perception of Myriad will change without heavily-short players trying to force the price down (An apology to those of delicate sensibilities--I was long Intermune while SAC Capital was short. Amazing how columnists and boutique analysts found weaknesses)

  • jacosa jacosa Feb 25, 2015 3:28 PM Flag

    I just bought back my calls and sold some stock. Increases upside at trivial cost.

  • Reply to

    Ridiculous P/E for a generics company

    by ndibari73 Feb 24, 2015 3:30 PM
    jacosa jacosa Feb 25, 2015 1:02 AM Flag

    Well, even with the confusion, it touches on the [demolished] bear argument. A small-molecule drug company that has lost patent protection is doomed to collect generic-like prices for its products. It isn't clear what happens to a biologic drug company exposed to biosimilars (tentatively, a good deal less damage than for small molecules). But a complex test is updated continuously, while a biosimilar biologic is frozen at the approved form. The leader has an excellent opportunity to protect its lead.

    Notice that the time from ordering to delivery of specialized hardware for MyRisk and the time from delivery of that hardware to integration with custom software are comparable. Competing with Myriad is not a matter of collecting yes/no test results and reporting them.

  • What's the OPPOSITE of death by a thousand cuts? We're pretty sure that the final phase 3, which is examining protection of joint structure, is more important for licensing than the other 3 put together. But this success has to be good news.

  • Reply to

    Nice Bullish sign closing Thur.2/19

    by bonkenx Feb 19, 2015 4:11 PM
    jacosa jacosa Feb 20, 2015 2:08 PM Flag

    While there's always the possibility of a late-breaking result, the regular ASCO abstracts have already been submitted and HH didn't say anything in the earnings call to suggest that he expects any presentation will get a lot of attention.

  • Reply to

    the 13g filing is helpful

    by netprophecy2 Feb 18, 2015 3:42 PM
    jacosa jacosa Feb 19, 2015 11:56 AM Flag

    Do you have anything in addition to Iridian?

  • Reply to

    Thinking about broken mirrors

    by jacosa Feb 18, 2015 11:24 AM
    jacosa jacosa Feb 18, 2015 10:24 PM Flag

    In my approach to investing, it's important to have the bull case and the bear case so you can classify news as bullish, bearish or irrelevant. I can make the bull case without waking up. It's very hard to make a really substantive bear case (for instance, could Momelotenib take meaningful business from Jakafi on any time scale we care about?). So I float possibilities of buzz killers or chances for a screwup on the business side.

  • I hate having to take the bear side against a stock I like, but without "Good TJ" there's nobody else.

    Remember when the "magic subgroup" was revealed to be defined by CRP alone? Not BAD news, but it cast a shadow on the stock and cost longs money--and at a time when many of us hoped that the revelation would MAKE us money. I'm calling that sort of thing a 'broken mirror.'

    Frankly, we've had a pretty long run without serious bad news. I'm looking for trivial stuff that could be taken as bad news and could generate a downward bias.

    A few months ago I tried to do some light industrial espionage and find out how many academic trials using Ruxo were "invisibly" supported by Incyte (it comes out when results are published). The non-answers suggested that the number was substantial. So suppose we get hit with a publication revealing that Ruxolitinib doesn't improve hangnails? Does that shade the stock? Or closer to the company, suppose one of the numerous "We'll study our drug in conjunction with either Ruxo or an Incyte candidate" agreements is terminated without comment? Nobody expects more than 1 in 5 of such fishing trips to lead to business, but actually ending one could be taken badly.

    For that matter, what if the Janus-s are stopped for futility? I don't remotely expect it and the value assigned to Ruxo against solid tumors in analyst reports has gotten small, but it could be taken badly.

  • Reply to

    why wont incy buy geron ?

    by circone Feb 17, 2015 10:48 AM
    jacosa jacosa Feb 18, 2015 10:59 AM Flag

    Also, Imetelstat has effectively been sold to J&J. While I think approval for mainstream indications is unlikely, there may be a way to get an exemption or something for "other" MPNs, stuff that used to be called "pre-leukemia."

  • Reply to

    why own this stock?

    by kkranker711 Feb 6, 2015 1:03 PM
    jacosa jacosa Feb 18, 2015 9:27 AM Flag

    All time high was $36. Bad enough.

  • Reply to

    Settlements

    by joe5322 Feb 17, 2015 10:32 PM
    jacosa jacosa Feb 18, 2015 12:53 AM Flag

    That's actually imaginable. The UXB in the kitchen was always the anti-trust part of the counter-suits, so the remote-but-devastating threat is gone. The value of products in the pipeline can be estimated to factor-of-3 accuracy--good enough to negotiate a price.

  • Reply to

    When, and how high?

    by jacosa Feb 16, 2015 11:19 PM
    jacosa jacosa Feb 17, 2015 8:23 PM Flag

    Somehow, I don't think those shorts who mostly sold in the $25-30 range would agree that they're doing wonderfully. They're hanging on is all. Right now, they can get out with like a 25% loss, which is bad enough. In a couple months that deadline is going to make the exit tougher. By late June, well, have you ever seen an actual corner? I've reviewed the couple I personally saw (uranium fuel and Maine potatoes). The shorts got off the hook in both cases, but it was a near thing (well, off the hook but you won't find Westinghouse or General Atomics so easily today, either. In the potato thing, the longs spoiled their case by having used fraud to build their position).

    I'm going to combine responses in case you get paid for the number of responses you get. I LOVE bull/bear discussions. I had a great long-running one (with mbersimenko) on the Intermune board. Funny thing there was that we were both right, and a person could have made a lot of money by understanding either side and acting appropriately. But you just make funny noises. Found a management forecast for 2015 that was missed yet?

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