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Strategies & Market Trends : Shorting stocks: High fliers -- Ignore unavailable to you. Want to Upgrade?

To: James Strauss who wrote (518)	8/5/1998 3:35:00 AM
From: Q.	Respond to of 709

James, re. TRBD, I'm sure a lot of shorts covered yesterday in the 5's and 6's. I would have covered too, if I had been informed by my broker that my short sell order had executed. With regard to investigating anything, I have no idea what the SEC does, except that it does little. I can tell you that I have followed Asensio closely since the first time that he issued one of his 'strong sell' news releases ... that was SYQT a couple of years ago, a brilliantly-timed pick. Asensio manages funds for clients. Many of his previous 'strong sells' proved to be brilliantly researched ... the companies typically have a single product, often in a development stage, and the product never materializes or performs, and the co. vanishes in a cloud of fraud. Examples include Diana Corp, which was a meat wholesaler that had an obsolete telephone switch it tried to sell to ISP's as an internet switch, and Solv-Ex, which claimed to have a proprietary way of extracting oil from tar sands that proved to be completely uneconomical. In both cases the stocks had soared as individual investors were led to bid up the stocks in what proved to be true stock fraud. Asensio hired expert consultants to help him research Solv-ex's and Diana's products. He issued news releases that were sharply worded, and had a certain spin on the truth. I don't regard the spin as dishonest, as it is not much different from what respectable companies do in their releases. Occasionally I have found Asensio's analysis to be weak, but often quite strong and deep. So you have to research things yourself. He issues his strong sell releases in the morning, shortly before the market open, which leaves investors little time to research the facts before the market opens, so I must work very fast reading the filings etc. to decide whether I like his research or not. The co. almost always comes back with denial news releases that threaten legal action against Asensio, and he generally shrugs them off and responds with more re-iterations of his own, at least until he covers. Asensio himself is a registered broker who like all brokers has a record with the NASD that you can check yourself on the web ... I checked it and I was left feeling comfortable.

To: James Strauss who wrote (518)	8/10/1998 5:12:00 AM
From: Q.	Read Replies (3) \| Respond to of 709

thread: HEB (AMEX, $8) is an interesting biotech that is flying high after being touted by the same German 'analyst' firm that touts TRBD. The analyst firm is 'Value Management & Research GMBH', which has a web page at vmr.de You can download an English-language .pdf file with their report vmr.de. The disclaimer at the end indicates that they might have a position in the stock or perform 'services' for the co. Within a month after this report, the stock soared just before it was listed on the Berlin exchange, with the help of none other than Value Management & Research GMBH. Chart, news etc. can be found at quote.yahoo.com Doing a little DD of my own, I found that: * HEB was brought public in 1995 by Stratton Oakmont, which doesn't have the best reputation, and * since 1995 the stock has been diluted nearly in half. * One of the dilution mechanisms I found is that the officers are paid partly with warrants. * They have done a discounted convertible deal since 1995, although the shares have already flipped. * The market cap of $175 M is now about 40 X the annual run rate for R&D, which is way too high for a development-stage biotech. Their latest private placement was 3.7 M shares of common stock sold early Sept 1997, and these shares come out of lockout after 12 mos., which is very soon. See prospectus excerpt below. The float is $6.6 M, so there could potentially be a big impact. I find this bit of timing info to be quite helpful, similar to the info you get for the sales of common stock associated with discounted convertibles. The co. is a biotech, with a drug Phase III clinical trials for the treatment of Chronic Fatigue Syndrome. Phase III just began last week, so maybe there won't be any results to announce for a while. A MarketGuide report is pasted below. Note the negligible short interest. from the prospectus: 1. Pursuant to the Term Sheet dated September 2, 1997, the Company sold 2,840,000 shares of Common Stock at $2.50 per share, through Hermitage Capital, Inc., the Company's placement agent ("Hermitage"), thereby raising $7,100,000. Hermitage received as compensation, 6% of the gross proceeds and 200,000 warrants exercisable at $4.00 per share and expiring on December 31, 2000. The shares of Common Stock and the shares underlying the warrants are subject to 12 month lock-up agreements. 2. Pursuant to the Term Sheet dated September 22, 1997, the Company sold 968,334 shares of Common Stock at $3.00 per share, and one warrant for every ten shares purchased. The warrants are exercisable at $4.00 per share and expire on December 31, 2000. The Company offered its securities through finders and broker/dealers, and paid commissions of 6% on sales, and one warrant for every ten shares sold. The Company raised $2,905,000 and issued 96,833 warrants to various investors and 88,234 warrants to various finders. =================================== Market Guide Quick Facts Report Hemispherx Biopharma, Inc SYMBOL: HEB EXCHANGE: AMEX PRICING DATA (AS OF) 07/31/98 RATIOS & STATISTICS Price 8.25 Price/Revenue (TTM) 484.16 52 Week High 9.44 P/E (TTM) NM 52 Week Low 2.63 Price/Book (MRQ) 18.45 Beta NA Price/Cash Flow (TTM) -30.00 Avg Daily Vol (10 Day) 0.60 Mil ROA (TTM) -74.12% Avg Daily Vol (3 Month) 0.25 Mil ROE (TTM) -86.33% Current Ratio (MRQ) 10.79 DIVIDEND INFORMATION Total Debt/Equity (MRQ) 0.00 Indicated Annual ($) 0.00 Yield 0.00% NOTE: TTM = trailing twelve months MRQ = most recent quarter SHARE RELATED INFORMATION SHORT INTEREST INFORMATION Market Cap. ($) 174.686 Mil Current Month 0.293 Mil Shares Out. 21.174 Mil Previous Month 0.221 Mil Float 6.600 Mil Short Interest Ratio 2.5 Day INSTITUTIONAL & INSIDER OWNERSHIP PURCHASES SALES NET PURCH %OWNED Institutions (3 Months) 0.679 Mil 0.750 Mil -0.072 Mil 13.1% Insiders (6 Months) 0.020 Mil 0.000 Mil 0.020 Mil 68.8% BUSINESS SUMMARY HEB and its subsidiaries is a biopharmaceutical co. using nucleic acid technologies to develop therapeutic products for the treatment of viral diseases and certain cancers. For the 3 months ended 3/98, revenues totalled $86K, up from $30K. Net loss fell 36% to $1.5M. Revenues reflect increased enrollment of patients in the Cost Recovery Clinical Treatment Program. Lower loss reflects the absence of a $1.2M Preferred Stock conversion expense. REVENUES (Thousands of U.S. Dollars) QUARTERS 1995 1996 1997 1998 MAR 761 18 30 86 JUN 272 0 32 SEP 1,923 10 93 DEC 10 4 104 TOTAL 2,966 32 259 EARNINGS PER SHARE MAR -0.050 -0.040 -0.150 -0.070 JUN -0.060 -0.070 -0.070 SEP 0.060 -0.100 -0.090 DEC -0.070 -0.080 -0.060 TOTAL -0.120 -0.290 -0.370 10/97, Exchange changed from NASDAQ to AMEX. FY'97 Q's arebeing reclassified.