IDPH--Positive preliminary results for pivotal trial of ID Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : IDPH--Positive preliminary results for pivotal trial of ID

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Zoran who wrote (525)	4/2/1997 12:47:00 PM
From: Brad C. Dunlap	of 1762

Hi Zoran, there are academic studies that have clearly proved that there is a lead time in option activity and stock movements. Is it possible to take advantage of this short or long in Idec's case is hard to say but is highly likely. It does make sense in a situation where one has a large amount of capital to invest aggressively to buy the options ahead of the stock. Obviously if one were to purchase the stock before the option they would be paying higher prices for the option since options move with the underlying stock and in most cases the stock does not move with option movement. I'm curious on two of your statements, where did you ever arrive at the conclusion that the April options indicate that the stock is going to move lower? Are you using this as a contrary indicator or just speculating in your own methodology. I will agree that covered writing is defensive, but am unaware of any proven correlation between covered writing and stock weakness. Also where are you getting your info on what % of Idec's options is covered writing or straight purchases? As far as Genentech's license fee hitting the 4th quarter has been discounted along time ago and will have no bearing what so ever on the stock. I will say if something went wrong and this fee was not received then the pain obviously would be felt on the downside. Your comments on having this fee received in the 4th quarter is absolutley meanignless since this is a non recurring fee and the mkt is aware of this info and instead is looking for FDA approval and then the early success on C2B8 in the mkt place. You have also have misstated the true insider selling and included SmithKline's 13D as insider sales. True this gets reported in the same manner as insider sales but any analysis should go farther and analyze the situation at hand. I am not hear to say that Smithklines selling is a positive because clearly that is not the case. However, if you would take the time to review all of their sales in the past 2 yrs you will see there has been no relationship in their selling and weak clinical data on CE9.1. In fact in the past they have sold after strong clinical releases of Idec's CE9.1. As far as the small true insider selling from the firm, you wouldn't be the first to go to the poor house if you followed this strategy in the past. I monitor insider buys/sales on a real time basis every day and found that some of the greatest stocks had huge insider selling[Stratacom,Cisco,Cabletron] as just a very small example. The question should be how much of a % of their holdings have recently been sold? If you looked a bit farther into your info you will find that it is relatively small. As far as Idec being a good short you may be right or wrong but the misleading analysis in your post is not the reason to short Idec or any other stock. Your the first to highlight that relativley large insider ownership which creates a small float is a negative. I quess management not owning any shares is considered a positive. Your comments should have focused in on the high institutional ownership which does not effect the float but can lead to greater volutility. On the technical side Idec had a bearish H&S formation on the daily chart of which it has broken down form this negative pattern. If the general mkt continues to remain under pressure and the economic reports continue to show strenght in the economy then it is safe to assume stocks like Idec are going to remain under pressure. Give me some hard info supporting that C2B8 is not going to live up to expectations or that CE9.1 is failing in the clinic. If you believe that the economy will remain strong and there will be continued rotation out of the biotechs, I will respect your opinion. However I am highly supect of your post being nothing more then an opportunist in a lousy mkt.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next