Depends on what is included and how the deal is structured. I've been advocating all R&D except for Captisol related projects. Also would be seeking $LGND to agree to an extended lock up and take no cash as part of the IPO. If newco were to raise say $150 mil in cash on a $150 pre, where $LGND holds its retained ownership, I could see a post money valuation for newco just to $400 right out of the gate, just on the fact it would signal that the R&D was to advance. Then it is all about study results, but expect a string of low hanging fruit Ph1b / 2 a studies could be announced within say 18 months of the spinoff. For the streaming biz, the announcement to end all pure R and just be a streamer would also goose its multiple and improve near term EPS estimates. Our plan is really a win win for Ligand as they get to advance programs and stand to gain far more upside, without footing the R&D bill.
CMG propelled on the back of a massive short covering rally, even as it missed on earnings and warned of further margin compression if & when it moves to non GMO food. Technically, the Oct 29th price action suggests the last of the weak hand shorts have been taken out. PPS looks to be on its way to test yesterday's lows at $522.78. If that level gets tested and breaks, and closes below $527, it will trip a bearish outside reversal day, suggesting a change in trend. There is a lot of air pockets below, so if it starts to come back to earth, it could do so fast.
While $HPQ did not paint an outside reversal on the 25th, on Monday Oct 28th price action (lower open, lower high, lower low, lower close, higher volume) should place all longs on alert. And Tuesday looks like another distribution day, as it struggles to close over its 50% swing Fib retrace. Note the development of a putative bearish rt shoulder on the 1 year weekly chart. If true, it would place a neck line in the $20.25 area, making the H&S target $12.72... just shy of a new low. While MACD histo is holding, with tax loss selling, I'd would not be surprised to see a retest of $23.13 before the end of the month.
Not in FIO, just stalking... but does seem to be painting a bull flag intraday. Still, a lot of blood in the water, so I would not be suprised to see it fade up here with perhaps a better entry point being ~$10 to $9.5 on a putative double bottom prior to year end.
So after giving weak Q4 guidance, $AKAM has been on a skid. But soon it will be about '14 &'15, so we still expect bright days ahead. Still, we sold all but our core in AKAM on 10/24 when it became clear that it was not going to close above $48.31. Seeing a putative double top pattern, that number was the key mid point nadir. Classic TA would now place a price target to resolve this pattern at $44.29... so that is where we are looking to reload with T1 and perhaps a T2 trading alotment. This $43 +/- 0.5 level area has lots of support, including the rising 2ndary trendline. A bounce from that area would likely run to retest the now broken primary falling resistance trendline seen in the monthly, now intersecting around $49.30.
As feared, $HPQ has broken the prior day close. A close here (below $23.88) is a putative bearish change in the minor retrace trend. Especially if it takes out $23.75. If that level breaks, one would expect swing traders to enter shorts at the close.
Don't exactly know when this stopped being the anything but $HPQ message board. But for a change of pace, let's get back to topic.
$HPQ has extended a putative gap fill move which would target $25.24, but is now in danger of stalling. Today's open, while not a higher swing high, was above the secondary restistance trendline, but then she started to slide, testing the trend. Some might see this as a pull back entry, however one might wish to pause given $HPQ has so far failed to take and hold it 50% fib swing retrace at $24.01 four times. With daily MACD rolling over, a close today below $23.88 has a rising probability, which would paint a bearish outside reversal day.
Welcome to the $QTWW message board. You'll note it is akin to one of Dante's levels of hell replete with its own imps. But if you can ignore the mindless howls of a few ardent bashers who have overstayed their party (and have a penchant for using multiple userids and need to find a new hobby), you might just find a lot to like in this well positioned turn around play.
To make a long story somewhat shorter, at one time it was an overhyped, bleeding edge tech play that lost its focus and thus its way. The old management seemed more committed to status quo than making hard prioritizations, and so started to dilute the #$%$ out of the company while adding more debt. Then their EV partner, Fisker, blew up... or more accurately, didn't have a long enough runway w/o the DOE to fix issues with the 1st gen Karma. And then it's battery supplier, A123, went B/K so the company could not make any more vehicles. The coup de grace came in the form of Sandy, as a fleet of the remaining Karmas went up in flame. With it early backers pulled the plug. Luckily for $QTWW, it saw the light some time back, got rid of most of the old guard and focused on Type 4 CNG tanks, which are in short supply and a historic competency for the company.
I care little about the R/S. It was the dilution to prop up the fat that caused much of the pain. As for the recent GM contact, I suspect getting additional funding was a requirement to secure T-1 status and the contract. So I don't share Chad's conspiracy theories. But no doubt he and others that got in much earlier than we did now have a reasonable Pavlovian overreaction to any talk about any management team at this company.
While not out of the woods yet, $QTWW can see the light at the end of the tunnel. And we now know this light is not another bonfire of Karmas in Port Newark.
Why one and not the other? We own both. As does Mr. Douglas.
$FSYS has much more international and industrial exposure, which is why it has been out of favor. If & when these sectors comeback, $FSYS will play fast catch up. If you can get shares at it's 200dma, it will be a steal. Of course, you might not get that chance if they perform as we expect in Nov 4th earnings. The $FSYS team seems rededicated to the UPOD playbook.
As for $QTWW, it is a classic bear to bull reversal, with change of both leadership and strategy paying off, and now stubborn shorts getting taken out back and shot. The late day price action is classic short squeeze... and thus more should be expected. The classic P&F chart has a bullish price target of $14, and is still subject to upward revisions.
Have been stalking $FIO after the August crush, and played the gap fill then, getting out when it could not close above $15. But likely will sit it out this time. Market mechanics start to take over and $FIO is ripe for some tax loss harvesting. Many have huge gains and will start to look for offsets to reduce taxes. The result suggest weakness for rest of Oct at a minimum, and likely into early Dec and perhaps a bit beyond. Still, if they can right the ship. $FIO makes for an interesting Bear to Bull reversal candidate for early '14...but till it shows more capitulation and bottoming, I have no position and am I'm on the sidelines.
Say it with me...new 52wk high. Music to my ears.
Here's what John can say:
1) Announce a refresh on the share repurchase plan... optics might be a bit odd given the new shelf filing, but with increased royalty revs, it makes sense that they refresh the buyback plan for 2014 and beyond. Far better alternative than dividends, but that too would cause a pop.
2) R&D newco spinoff, a la the PDL / Facet deal years back, and the more recent Theravance spinoff. I've been riding his horse for over a year now, and have even recently spoken to the team about it. While I don't see him announcing such yet, John did say they have started to evalute a number of ideas. I'd love to hear him to utter the phase, "we are evaluating all our strategic options for the R&D business." He says that and it's in the 60's in seconds.
Both would be classic move that would launch the stock into the $60's and 70's for starters. But dont get too worried by stock price here. Push out to a 10yr chart (and make sure the R/S is correctly charted) and you will see a PPS that has yet to return the what it was when John joined the company, but now has a broader, more mature, lower risk, higher margin revenue stream. Also consider the move to a different P/E comp set from high risk high dilution biotechs to that of low high high margin royalty streamers.
In particular, this newco spinout will clarify for the market that Ligand is no longer a drug development co, but a streamer worthy of a higher P/E. If the split was done right where $LGND didn't take any of the raise & agreed to say a 1 year lockup for shares held, it would provide new funding to accelerate mordibund yet promising R&D programs in newco, and down the road a nondilutive way to raise capital for the royatly biz that accelerates a buyback or divs. It's a clear win-win and a no brainer.
A penny stock with 5 yr revenues drying to a trickle, with high R&D and SG&A, and still sporting a $159 Mil MCap as it has 2.6 Billion shares outstanding (am I seeing that right?)? And stem cells? LGND? Sorry. I just don't see it as remotely possible.
LGND is a royalty streaming play. So any target first and formost needs to have current royalties. Additionally, they have proven the model of buying distressed under the radar names they can clean up. And they like the 505b2 formulation plays.
My LGND shopping list includes small 505b2 small development only companies like $IGXT (MCap $27.4M) one approved drug, a 2nd 505b2 NDA at the FDA, and a collection of formulation tools. Another might be $INSV (MCap 26.4M) which has some royalties, and a confirmatory 505b2 Ph3 readout by year end, also a formulation technology. The latter has a fair amount of debt - but they are working it down and actually this debt is another place $LGND could extract more value, as they could refi this debt on much better term.
AH move to a very bullish new higher swing high on the numbers (well above the Dec '11 high, and after failing to make a lower swing low in Oct '12) , then a crash on soft q4 guidance? Both a breakout and breakdown in minutes. Which do you believe? I suspect this move off the bottom here is the tell.
I suspect the market will look beyond Q4 into '14 & '15 and like what they see. So while $48.21 may be retested at the open, but I would not be surprised to see an aggressive move off the bottom thereafter given what I see as standard UPOD for the 4Q and the new buyback. SOP for open market share repurchase plans is they usually do not operate in the first and last minutes of a session to avoid claims of price manipulation.
The PPS needs a close above 50.65 tomorrow to maintain the rising tertiary support trend, but even if it doesn't, that trend has been so steep as to be barely sustainable and already has one crack. A close above $48 tomorrow (ideally above $49.91, the 50 MA) would help establish a new more suitainable support trend and remove some of the rising wedge technical concerns. As long as October does not close below $46.4, the technical setup remains supportive good through the end of the year to push back into the mid $50's and above and allow for better than expected '14 guidance next qtr.
Right there with you Scrut.
That's Mr. Douglas's business model. Find small bolt-on size turn-around plays in secular growth sectors, invest heavy and then shop them hard. And as a major investor in both $WPRT and $FSYS, he knows this space well.
It's been a long few years in this turn. Admittedly, we started to buy too early (as we often seem to do) when we saw the writting on the wall with the exit of the old guard and the wind biz. But we buy slow and then made some well timed aggressive buys. Sure, we had hoped for more monitization of the EV biz, which might still have value. But first and foremost, we bought in as we are believers in NGV and see a widening shortage of Type IV tank supplies.
The September 18, 2013 convertible note financing round lead by Mr. Douglas removed the near term concerns of insolvency and further massive dilution - the twin fears that drove the PPS of QTWW to such levels. And his appointment of Mr. McGaw to the BoD suggests that he is far from ready to take profits on his 5% ownership in the company.
Now with PPS over $5, $QTWW will again qualify for investment consideration in funds that have covenants against holding low priced securities.
Like a basket ball filled with air held down at the bottom of a deep pool then released, this stock has been rocketing back to the surface ever since the financing, and still has much more to go. And once at the surface, expect it to catch further air before floating at fair value once again.
Sentiment: Strong Buy
And with it, about 200K shares were bought, causing another bull flag breakout. With so few shares trading leading to such an agressive move, and such a high short interest, you can bet there is much more to come.
$GDX is again testing its revised secondary falling resistance trendline (defined by 10/31/12 close to 8/26/13 close), an breakout is expected soon, as it is also noted the index has so far failed to make a new swing low since the June swoon. Classic rounding bottom action.
While $GDX performance may lag into year end give tax loss harvesting, the index is well setup for a massive snap back to its primary falling resistance trendline (defined by 9/20/2011 and 9/19/2012 close) in December to early next year. Such would target the $39 to $41.75 resistance band. At that point, one might expect cup/w handle / bull flag behavior.
Playing this move via $NUGT.
The fact that $AKAM avoided a bearish outside reversal day on Oct 21st should be respected. The immediate result was the gap open, which was filled and now retesting DHs. Expecting HFT to shake the tree and thereby force a test of the $53.2 swing high prior to earnings.
With the debt ceiling talks pushed off till Jan, $EEP and other MLPs seem ready to play catch up. The index ($AMJ) confirmed the breakout last week when it closed above $44.48. Now this week has already made a higher high the month is looking hot. Watching the test of $47.88 on the AMJ, which would be key if we get a close this or next month above that mark. Such a move by the sector would likely toss $EEP into the $32 + range on its way to test the $34 level. All aboard...