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Biotech / Medical : Biotech vs. Shorts -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (82)	8/3/1999 12:00:00 PM
From: LLCF	Respond to of 427

< "Margins are decelerating" > That's a great laugh Peter... where do these guys come from??? You just wonder who these guys are that hang their shingle out as investment advisors and start yelling "short the world". He probably thinks its a broken .com play based on the chart! DAK

To: Biomaven who wrote (82)	8/3/1999 12:08:00 PM
From: rkrw	Read Replies (2) \| Respond to of 427

Kimmel's comments are horseshit, period. They're not even worthy of a response. He's shorting a technically broken down stock; he doesn't care what the truth is, he just needs a simple thesis to pass along. TheSteet.com is just a shoddy, amateurish tool. The irony of TheStreet.com's journalism is that at the moment, its stock is at an all-time low of $22, down from a high of $71.25 set just a few months ago.

To: Biomaven who wrote (82)	8/3/1999 1:56:00 PM
From: Harold Engstrom	Respond to of 427

Peter, Was stunned to read that TS.C article a few weeks ago: I had taken them up on their free trial period and that was the first article I read. At the time, I couldn't decide which person was the bigger dolt: Kimmel for making the comment or Greenberg for quoting him. Upon seeing his response to the many emails that set him straight (where he just reiterated what Kimmel said), it was clear Greenberg deserved the prize. I'm with you: SEPR holds huge potential and I believe that it is just a matter of time before it absolutely explodes to the upside. But, when people increasingly believe 6 months is a long time to hold a stock, 3 years seems an eternity. But, that is the great thing about biotech investing: the myopic vision of the general investing community gives rise to great opportunity for those who have some patience and are willing to learn something about how these companies operate and about the indications their products will treat. I do believe that SEPR is one of the coming stars of this industry. However, it is the exception. There are companies like GLIA and CLTR and SEPR and then there are the majority of small-to-mid-sized biotechs that probably will not make it. I agree that a short position does not usually mean everyone else just doesn't get it.

To: Biomaven who wrote (82)	8/3/1999 4:42:00 PM
From: sam	Respond to of 427

I'll never forget when AGPH was 21 and some "expert" was given the CNBC floor to claim AGPH was a 15 dollar stock (and, oh yea, he was short too). Next thing I knew, AGPH was getting bought out in the high 40s. Point of story? Some of these experts are idiots. I hope no one I know has any money with this Kimmel creature. Sheesh. The good news is -- at least now we know why SEPR is falling. Probably means it is now a screaming buy. (As if it wasn't this morning!) ;)

To: Biomaven who wrote (82)	8/3/1999 5:08:00 PM
From: BMcV	Respond to of 427

Peter, thanks for providing the link to this thread (which looks great) and putting together the dossier on this guy Kimmel. I don't agree he's a dolt, even though he's obviously saying some stupid things. He has spotted SEPR as a highly volatile vehicle with a sufficiently complicated story to make it easily manipulated. Unfortunately, some dolts will take his advice and short the thing, probably just when Kimmel himself covers. I think financial journalists make it rather too easy on themselves by following just disclosure rules. A six paragraph piece by Abelson ragging some stock is hardly diminished by simply noting, "needless to say, my source is short the company". Greenberg had at least the obligation to check a few simple facts (SEPR's actually high insider ownership; "tremendously high debt" is convertible debt) and point out a few obvious connections (this is a development stage company, so revenue and margins are meaningless). You have to wonder when a journalist abuses their position this way consistently. Besides Greenberg, there is also a female staffer on the WSJ whose name escapes me but who has had two similarly negatively-weighted articles that could only be understood as short plants. All we can do, I guess, is watch and learn, which is why this thread is such a good idea, and use the excess volatility to our advantage. Time to buy some calls.

To: Biomaven who wrote (82)	8/3/1999 5:25:00 PM
From: RCMac	Read Replies (1) \| Respond to of 427

>> here we have what I can only term a naive short getting considerable play and respect ("remember this is the guy") and no sensible skepticism in TSC.<< Peter, you've put this very charitably, but I read this more darkly: it looks to me like Greenberg and TSC really want to throw in their lot with the short-sellers, whether just because they're good copy or for other reasons I can't say. And it's kind of you to call the short just "naïve" - I suspect he's knows what he's doing when he badmouths the stock (to his short term benefit - long term he's toast if he stays short, IMO). While we're archiving Greenberg's/TSC's intellectual dishonesty: Here is the link to Greenberg's blast today re SEPR, quoted by Peter: thestreet.com The earlier installment of Greenberg's willingness to give this short seller a forum was discussed in a number of posts on the SI SEPR thread, starting with Peter's May 27 post #3056: Message 9794179 and again at around post #3126. My SEPR post # 3061 has a link to the original TSC May 26 article: Message 9798373 I see Harold Engstrom (post #91 here) also sent Greenberg a number of e-mails in response to the earlier columns, and found that Greenberg, despite e-mails setting things straight, preferred to parrot the crude nonsense of his first column on Kimmel. That was certainly what I found in my "exchanges" with Greenberg. Greenberg's column today, continuing to do the shorts' work for them, seems to further support the inference that Greenberg is perfectly happy to spread this garbage, even when the factual errors have been pointed out to him. For the record, just in case it's not clear <g>, I agree with your statement that "I still think SEPR is the single best bet in biotechs, so I'm likely prejudiced here." --RCM (Ann Arbor)

To: Biomaven who wrote (82)	8/3/1999 5:42:00 PM
From: RCMac	Read Replies (1) \| Respond to of 427

While we're documenting that Greenberg was well informed about Kimmel's misstatements concerning SEPR (but is willing to repeat them uncritically despite that knowledge), let me archive the following: Following my first e-mail (to TSC's editor, copy to Greenberg), and Greenberg's response in his 5/28 column as quoted by Peter in the post this is a response to, I sent Greenberg an additional e-mail, including the following: " . . . rather than taking the opportunity to dispel the impression that you're willing, perhaps eager, to help promote the agenda of [a] short-seller, you choose to reaffirm that impression. "USUALLY YOU TRY HARDER. Why the relaxation of standards? Don't you and TheStreet.com want to be taken seriously by the investment community? Why don't you and TheStreet.com again try to back away from the sort of hype represented by Jordan Kimmel's crudely false statements. "For your and your editor's reference (quoting from my 5/27 e-mail), the statement of Mr. Kimmel you quoted included "three main areas of factual misrepresentation:" "(A) it is just flatly untrue to say that "insiders didn't own a share" [actually, they own 2.425 million shares, 7.4% of the company], which Greenberg could have rather easily found out;" "(B) to say that SEPR "had high debt" misleadingly overlooks the facts (1) that virtually all of the debt is low-interest convertible debt, much of it convertible at $47.369/share, below even current stock prices, and (2) that SEPR has cash [$462 million at 3/31] equal to much more than the $300 million debt convertible at $124.875 [and, not so incidentally, is putting that cash to very good use in developing its drug candidates ("ICE's"], and" "(C) to say that SEPR "lost its air" with the JNJ decision about "Sepracor's allergy drug" [not "one of SEPR's four allergy drugs"??] largely overlooks SEPR's other five big pharma partnerships and 20+ unpartnered ICE's. Two of those partnerships are for improved (and patent-extending) versions of allergy drugs Claritin (in phase III) and Seldane (on the market as Allegra)." [I should have said, not five but "four big pharma partnerships and its unpartnered FDA-approved Xopenex"] "The facts are that SEPR is financially very strong; is run by executives who, strikingly, have never voluntarily sold a share (the CFO lost most of his in a divorce last year; three of the outside directors sold part of their positions earlier this year); and has a pipeline that compares favorably with most of big pharma." "This willingness to publish, uncritically, the manipulative comments of a short-seller, suggests (1) that Greenberg, if he wants to be taken seriously as a journalist, should do his homework better (maybe read a balance sheet? spend five minutes on Yahoo or somewhere to check the insiders' stockholdings? - has Herb really ever heard of a development-stage biotech where the "insiders didn't own a share"?), and that (2) he should be quite a lot more wary when quoting an "analyst" so obviously in full self-promotion mode. This was a disgracefully long way from serious financial journalism." "BTW, if you're going to paraphrase me and give my name, please don't mischaracterize what I say. "You wrote (5/28) that I "accuse[d] [you] of shoddy journalism because Sepracor's management owns 7.4%." But I didn't accuse you of shoddy journalism for missing a fact, but for the more serious offense of running Jordan Kimmel's several misstatements of fact without any checking, despite his obvious agenda, and from this apparent indifference to factual accuracy - not just from blowing a fact -- I drew the inference that you had shoddily fallen far short of appropriate standards of financial journalism." Greenberg responded by e-mail: "In a message dated 5/31/99 11:55:33 PM Eastern Daylight Time, Rober98@aol.com writes: "<< when I helpfully (if aggressively) pointed out his several factual errors you choose to correct only one of the several errors (about insider holdings) but quoted the short-seller's "explanation" minimizing the crude factual error, and thus minimizing your journalistic lapse in standards. "Thus, rather than taking the opportunity to dispel the impression that you're willing, perhaps eager, to help promote the agenda of an apparently dishonest short-seller, you choose to reaffirm that impression. " USUALLY YOU TRY HARDER. Why the relaxation of standards? >> "no relaxation of standards. i consider the other points to be subjective... that one guys low debt (convertible at 47) is another guy's high debt (hey, it's debt!) and the jnj reference WAS thee reason the stock fell." Despite the above (and Harold Engstrom's effort to instruct him on the facts) Greenberg was content today to quote Kimmel, again: "On the downside, he [Kimmel] says that Sepracor (SEPR:Nasdaq) is still his No. 1 short. "There's still tremendous debt, margins are decelerating and insiders own little stock," he says. "I think it will absolutely implode." "Remember, this is the guy who told me (and I chose not to print because I couldn't verify any trouble at the time) the same thing about McKesson (MCK:NYSE). " Maybe I'm showing my puritanical streak, but "shoddy journalism" seems too mild for this. --RCM

To: Biomaven who wrote (82)	8/3/1999 8:52:00 PM
From: Mark L.	Read Replies (1) \| Respond to of 427

I want to compliment you on a very interesting thread. But I'm curious--which biotechs would you consider good shorts? And why?

To: Biomaven who wrote (82)	8/4/1999 7:22:00 PM
From: BMcV	Read Replies (1) \| Respond to of 427

Keep coming back to theStreet.com 's bit on Sepracor. The more I think about it, the less likely it seems like just shoddy journalism, sensationalism, or some other generic problem. I don't think Herb Greenberg was just short at deadline. The mystery is why repeat something twice that he knows (as we know from his response to RCM's emails as well as his next-day follow-on answering the email from Robert Macek) is false? To me, the formulaic repetition was reminiscent of nothing as much as a paid advertisment. This raises a much more serious question. Was Herb Greenberg paid by a professional short (Jordan Kimmel of Magnet Investment Group) to trash one of his objects? Another shill, Dan Dorfman, comes to mind.