Thanks for the response.
My take FWIW: The valuations simply do not support the business plans. I have followed these companies for years and watched the development of this space with interest. Proteomics will be big, very big. SNP's are important, very important. Raw sequences are rapidly becomming a commodity. Faster than many believe. Royalties will flow at some point down the road. However, the current price reflects perfection, both vision and execution, of the business plan. Super simplistically; If I have an expectation of 20% gains compounded to compensate me for INCY's model . . . at today's price means that INCY will have a market cap of apx. $18.4 billion by 2005. This could certainly happen; however if I change my expectation to 30% the market cap would have to be $27.5 Billion by 2005 and over $100 billion by 2010. Yowee that is quite a number. My risk to return see-saw does not like the odds at these prices.
Long winded, but what would be nice is to hear a bull case at these prices. If I am wrong I will gladly buy in and admit to the world my ignorance.
Again IMHO: The internet momentum guys have invaded the space. It is the same MO: Low floats, not many companies, change the world dynamics, high beta, news driven, lottery mentality amounst the buyers.
Anyway thanks again for the response.
Cheers, |
