From Vadim:
Walter Morton (who wrote...)
From: Vadim D. Marchenko
Wednesday, Dec 9 1998 5:10PM ET
I personally like the current CIST better than CIST owning HMGN but no cash. IMHO in these volatile times cash is the king, especially when you get it @ discount.
Take a look at the price performance, compared to an average small biotech it performed remarkably well - it practically did not loose value in the past 2 years, which is much better than the average biotech.
As far as seeing some run up, IMO it is just a matter of time, you have to be patient. Even if takes them all of 3 years to nail this vaccine deal and start getting the royalty, the reward will be well worth the wait. In the meantime there is not much risk of them running out of cash since their burn rate is minimal and their vaccine research would be subsidized. If they come up with some other deals in the meantime - better yet.
I do not understand all this buzz about share buyback. Let us assume it happens and stock runs up to $1.00, then what ? Are you selling it @ $1.00 ? Was that your target when you invested in the stock ? If not and you intend to hold the stock until they complete the trials, it is detrimental to you because now you own a company with a lot less cash,(a larger piece of it though), but when cash runs out they would have to issue additional shares and dilute your holding, most likely to way below the % you owned before the buyback because usually new batch of investors gets a sweeter deal. Some companies would sell out their current shareholders completely by issuing the floorless preferred, in which case your holding becomes worthless. How does that sound?
At least while they have ample cash position, s/h do not have to worry about all these nightmares which is just fine with me.
What is everyone complaining about ? If CIST comes through on the trials, it would be worth 20 or 30 times more, in the meantime the co is sitting on a pile of cash larger than the s/h investment. It does not get any better than this.
If you know better positioned companies it terms of risk/reward ratio, please let me know.
Thank you.
Vadim. |
