Questions every Lidak investor should be asking:
Scenario A: Lidakol works, and is going to be a great drug for the treatment of oral herpes and will make lots of money. If so, then one must ask the following questions:
1) Why did 2 insiders dump close to 50% of their holdings the last few months at about $2 a share (essentially at a 5 year low) and prior to the recent phase III announcement in December? (source: www.insidertrader.com)
[Date] [Shares held/sold ] [Insider ] [Price]
(7/1/97 ) 10,650/5,000 Officer $2.13
(10/31/97) 18,240/8,000 President $2.28
2) Why did Katz just dump 30% of his holdings at a time Lidak was scraping a 5 year low in price?
3) Why did Bristol Myers walk out the door and open up Lidakol to its competition, when it would have cost them next to nothing to stick around until the FDA decision comes out in a few months?
4) Why have the CFO and Chairman of the Board quit within the past few months?
5) Why does it appear that Katz, too, is trying to get out?
6) Why have they not publically disclosed any of their "positive" results?
Now let's be skeptical, conservative investors and consider Scenario B: Lidakol does not work, or is only marginally effective. Through the magic of statistics and misleading statements, however, we can hide this fact for awhile. Again, look at my post #827 that describes a scenario in which Lidakol is worse than topical acyclovir, but is still allowed to make the statement that "Lidakol is statistically comparable to the best treatment available for herpes" without lying. Was it Mark Twain that said "there are 3 types of untruths - lies, damn lies, and statistics."
Now, if Scenario B is true, then the above six questions become very easy to answer. Indeed, these recent developments are exactly what one would expect Lidak and its insiders to do if, indeed, scenario B is true.
The only "pro" argument I can come up with right now is one could argue that HealthMed is showing confidence in the company by ponying up some money. But apparently, they only need to put up 30 million for now, and subsequent capital infusion depends on the FDA decision.
I've watched or invested in many companies that went all the way to zero. I know the warning signs now. Obviously, I don't know for sure. Please, fellas, be careful out there. |
