This is all short covering. Longs buy too high and sell too low. If it goes up another dollar or two, you'll see longs get excited and start buying.
Conventional wisdom is to sell a stock that issues a secondary. The secondary price becomes a short term high. Yet this is not always the case. I think we need to look at the purpose of the secondary. In this case, the cash will be used to manufacture the anticipated approved MD drug.
Several months ago, PXD issued a secondary at $125 and I thought that would cap the share price. I was wrong; it is now near 200. Different industry, but it just goes to show that you need to know what the driver is of the secondary issue.
If you look at all of the failed drugs that never made it to market, you'd appreciate the work the FDA does. Most people are unable to evaluate the potential benefits and negative side effects of drugs in development stage. How much would you be willing to pay for a drug that offered hope, but no actual therapeutic benefit?
FB was manipulating the news feed. Think of it as getting a newspaper with all of the news that either good or bad, from your perspective, being cut out. This was basically how the newspapers of WWII Germany worked; no news that would have questioned the war was permitted to be printed.
While AMZN, etc. look at your preferences in deciding what to advertise to you, they don't try to change your mood or attitude toward a specific topic.
41% of the float is short and based on average volume, that would take 13 days to cover. Now, the question becomes whether the longs have to courage to hold onto shares on a day when price is near the high set in Oct 2013. By 11 a.m. we should know.
As shorts cover won't more be available? With the big short position, you'd think there would be more protective calls bought, but that is not the case.
So you're expecting someone else to buy shares and create the buy signal? That's the problem with technicals: everyone expects someone else to make the first move.
So you bought your house with cash? Debt to capital isn't a useful measure. Debt to cash flow is useful. What am I doing? Why am I bothering to provide you with a free education?
I just read a follow-up article that more clearly describes the results. Clearly the drug is not a cure; it simply slows the decline of muscle function. Like a treatment for hypertension, it does not seem to be a one-shot treatment, but was that ever the expectation?
Many drugs that fail to make it to market have side effects that override their benefits. In this case, that is not a concern.
I suspect we'll be arguing whether this is good or bad data for quite some time.
Really? A couple of years ago I invested in an RNAI biotech and they had a similar proposed offering. Stock went down, but it wasn't more than a month later that they were bought out at twice the market price.
Look at it this way: if a company is going to be in a good negotiating position with a suitor, they better have some alternative strategy lined up.
I'd like to see it supported with some volume. This low volume makes it too easy for someone to reverse this trend in a heartbeat.
And with a 45% short position, there's nothing to move the stock higher. All the buyers are gone because nobody wants to try to guess a bottom.
This strategy limits net losses and gains. Stock is near its high and perhaps it is best not to be too greedy. After earnings you can decide if it is still fairly valued. If it closes at 200, you'll make about 3% for one month.
I've noticed that too. Let me add PXD to the list. However, it climbed on earnings (not as good as RIG), and then fell the next day. Yes, it could be oil prices, but that is just silly investing. Everyone knows that prices go up and down on a daily basis and the value of a company goes well beyond just what they can sell oil for on a particular day.
You are right. In fact it already touched 50.55 today and then slid back down to 50.00. Pure genius.
Share price will not be able to hold a gain. Too many longs are now looking for an opportunity to get out with minimal loss. I don't think there are enough new buyers out there to support a higher price.
This is the strategy of short positions. Push the price down so that longs simply want to get out.
Once again, I think options are driving the price. It sank to the 30 strike and is now recovering a bit. There are simply too many people or machines pushing the price up or down without any reason.
Note that while NE is down 2%, PXD is up 5%. You can already guess which has the lower p/e.