Interesting that all shares are loaned out at fidelity and the current annual rate to borrow is 19.5%, that's up from about 7% a few weeks ago.
Contrary to the popular opinion, the larger brokerages don't pull shares from lending just because of a GTC limit sale order.
How do you find it hard to buy? I just opened up my account, typed in 500 into the "shares" column and picked up another 500 shares in 1 minute. It was pretty easy.
yeah it's been a wild ride in the biotech sector for the past 6 months. I've got IMGN and ARIA besides KERX, and they both like to move 5% each day.
KERYX has a tiered royalty structure. It was 5 M upfront payment, 55 M in milestone payments, and a tiered double digit royalty structure in the press release. I later found that analysts expect 13% royalties at peak sales, so about 10 M dollars per year.
So there is +1000 15 call contracts and +1000 15 put contracts.
First off, this looks like a synthetic stock position. (buy calls, short puts, or... short calls and buy puts for a synthetic short position). I think we can make some assumptions.
1) The 15 strike call options were bought, not sold. There's not enough interest to sell 1000 contracts at 15 strike for 0.10. If there was any interest I would usually be selling 10-20 of those each month to make an extra 100 bucks.
2) The 15 puts were sold as a bullish play. If you were going to bet against the stock, a short position would cost you 8 dollars. Those puts currently cost 7 dollars, and have much worse liquidity. If you were going to make a large put purchase that was bearish, you would go for something closer to the money, not deep, deep deep in the money.
So I think someone made a synthetic long position, buying 1000 calls and selling 1000 puts, and they expect the stock to be north of 15 dollars.
Its ironic then that they bought on 4/30 and by 6/30, their 6/30 filing shows they have sold out of all 600,000 shares they owned. I guess they dumped and ran.
Why did your broker suggest this stock? I'm surprised that a broker would suggest a biotech with only one product and not even selling that product yet. Why didn't he suggest something like celg?
Its all good, just needed something to joke about now that the information flow has dried up.
I'm thinking of selling half my shares now and letting the other 85 shares ride till next year.
Maybe adam feuerstein will write an article about this and give me an entry point a dollar lower.
This is incorrect. They monetized their Kadcyla for 200 million, and said they are ending the year with 265 million. No need to do a cash raise, since burn is generally 100 million per year.
" We now expect to end the year with between $265 million and $275 million in cash and securities, compared to previous guidance of $75 million to $85 million."