Baltbear on Finance markets are like marshmallows

i rceived an email a couple ago asking, basedon a conversation elsewhere, what i meant by ” shake and bake” –was i referencing talladega nights?

nope. the termpredates that movie by a decade.
let’s explain:
so, mm’s see a surge tomorrow on ticker abcd:nasd.nm. how? because sallimay, the daughter of the ceo told her sorority sister, the daughter of the hedge fund manager, that she was going to shopping for a new beemer on saturday.
(don;t think that happens? i once had an associate who was chief of security for a rather expensive private college, who did his most successul trades based on whether visiting parents, who were all ceo/cfo/coo/etc types were smiling or somber whe they greeted their daughters.)
the mm can see, on his screen that there are a total of 100k shares hanging in the float wth limit sells, and stop loss orders.
let’s say abcd is trading at 15, and there are stops in all the way down to 10. a stop loss at 13 5/8 will execute at 8, if that’s the clear (the “market”), and there’s a buyer. so.. he offers to buy 80k @ 8, and sell 1k at 12, 1k at 11, 1k @ 10, 1k @ 8 1/16. somebody elsewhere (like me) has a limit buy, 1k @ 8 1/8.
as soon as the “enter” button gets hit, the domios fall, and all 100k of stop losses kick in, looking for a buyer. why? becuase that 1k @ 8 1/15 sell hit my buy 1k @ 8 1/8.
the mm is now short 1k, but, if there are not limit buys in for 99k more between 8 1/8 and 13 5/8, all those stop losses are going to pour into the mm’s account.
and 2 minures later the whole thing is over.
and that’s shake and bake.
think things like that never happen? tat the markets are not that corrupt? that hedger fnd managers are your freinds? that ur broker is looking out for you? that that hypster on a stock board cares about the company? that the regulators will prevent this?
ok. keep beleiving it. or else note:

as stp loss order kick in and the machines talk to themselves

then read the chage in “analysts” lol…”sentiment” today.

Posted under business

someone suggested to me that i was paid to bash biotime (btim.ob). i replied that the paid bashing on the net was being done by steven seinberg, chief financial officer (cfo) of biotime, in posts to the securities and exchange commission.  it is of interest possibly to note that  some anonymous person publicly stated a day or 4 ago that biotime was about to receive a $5mm grant.  That’s the kind of world where bucket shops and boiler rooms thrive: people doing honest analysis must be “paid bashers” while people doing mindless and dishonest cheerleading to protect teir positions are considered “loyal shareholders.”
here’s an example f what i mean:

the 8k filed on 0417 describing what happened on 0415:

The maturity date of our Revolving Line of Credit has been extended to December 1, 2009 with respect to $2,669,282 in principal amount of loans. (a revolving line of credit for $2.669mm got a new date, 7 1/2 month away.)

“We repaid $223,834 of principal and accrued interest on loans that matured on April 15, 2009 and were not extended.
(some part of the credit line was shut off, and paid out. does biotime bother to be honest enough to say which part?)

” In addition, certain lenders exercised their right to exchange $572,404 of principal and accrued interest on loans for an aggregate of 473,131 of our common shares.”
Does biotime bother to say how much of the $572k was principal and how much interest?  some loans were at 12%.
if one speculates that 12% is the figure, and 1 year the time period, then the lender lost oportunity for 1 year on apx $511k, and then was traded for 473k shares, for a basis of 1 3/32 ish…. ($1.08).
And actually, its worse than that. How??
becuase, to use a term from aother world, biotime had to pay vigourish on the loan. it was forced to give for free  91,526 shares, based on a 6% iterest rate, to the lenders.
91,526 is therefore 6% of what? 6% of the $2mm comes to $160,156. and that converts to 91,256 shares how? on a basis of 1 3/4 ($1.75 a share).
does this sound like an invented number?
biotime identifies this number:
“Promissory notes that were exchangeable for our common shares at a price of $1.50 and Embryome Sciences common stock at $2.50 until April 15, 2009, may now be exchanged for our common shares at $1.75 per share”
and i offer that as evidence of the soundness of this analysis.

a coupl;e of days later 14ds were filed with the sec, and the movement from the dtc to the recipients had to cross the tape. it crossed it at prevailing prices f the moment, cuasing some to see a “rally” which they traded into and or out of.
However, the idea that the buyers actually paid anything more than is stated above is a fiction.
Biotime would, imho, have a moral and fiduciary duty to identify it as a fiction.
Did it?
ask the reporters who called (or were they called??) what the ceo, dr michael west said.
then the prudent speculator has a metric for the integrity of the “science” of biotime.

the “good news” in this 8 k is that the exchange price isn;t 16 cents.
the hoest news is that this is the 5th amendment to a credit agreement that is nowhere near being retired, and there is no evidence in the 10k as to how it ever will be.
bottom line?
people buying biotime stock are not buying equity in biotime, bcuase there is no equity except patents 1/2 way thru their life.  they are supporting the acquisition of biotime by al kingsley and neal bradshear, who are paying next to nothing for it.

” We may borrow up to an additional $830,718 under our revolving line of credit if we elect to do so and are able to obtain additional loan commitments from our current lender or from new lenders.”

notice how bio time cannot, unnder thee covenenants borrow $1 mm from somebody new.
notice how biotime evidently needs permission from the current creditors to eve look for financing, up to the $830 mark.

Posted under business

i got an email asking me for a claitrification of a posting to a yhoo board concerning what tokyo mex woulda called a “whore stock”.
those who wish to become proudent speculators might not understand this one. so, let’s go thru it:
:” >>no ticker<< gets very far away from its next years eps x inverse of the long for more than a couple years, without a harrrdddd correction following.”
ticker–that is, symbol for a publicly traded entity. generally, “shareholders” actually own nothing except the perceived trading floor “value” of the ticker.
(and if you don’t beleive that, find out what happened to preferred stock of things like gblx and wcom.)
the market aniticipates: that is, it makes bets. otherwise the “value” of a stock would be no more than the “book” value. “next year’s earnings” is something to bet on.
if a ticker’s stated earnings go up on a steady course, one can speculate that the perceived value will go up as well.
even in the wildest markets, there is a certain baseline: what can i do that will not lose any money?
so, if a long term government bond pays 3%, (and thereby double in nominative value every 24 years, no matter what happens) and the speculator looks for a way to beat doing nothing, then, if the price to earnings ratio current on a stock is 25, then 25/1 x 1/33 = >1.

if the “long bond” paid 4%, it would be a wash: 25/1 x 1/25 = 1.
the prudent speculator will then hold the bond.
what about inflation? this fear drives people to hold the ticker, because “wait til next year” means that earnings will be “handsome” and therefore (wha???? rotfl)
the p/e will be, let’s call it 10, meaning the bond would have to pay 10% to be even. could that bond pay 10%?? yeah, if the fed is trying to push $$$ away from stupid losing speculations, and impose some sense of reality.
so, if the long bond can be guessed to stay around 3%, then tickers showing earnings that stay or grow can be selling at  p/e of 33.
if a tickers has a p/e of 0, because there are no earnings, a guess can be made about the future. let’s say a company has 25 million shares outstanding, has expenses (including debt service) of $5mm. the company says that next year it will take in 5 million in revenue. it’ p/e is still 0.
let’s pretend it says it will use that money to make 10 million more. now the guess is that 2 years out it will have $10mm going first to $5mm expense, and $5mm to ticker, for a earings per share of ?? 7/32.
times 33?
ooooo.. now it might could possibly, cross ur fingers and sacrifice a rooster, get close to 7.
provided its expenses while doubling its inflow of cash do not go up one penny.
can that happen???
only on forums where penny stock hypers stalk about inventions and science, and anything else to get you to buy the stock they are ready to sell.
new companies have “storys” to tell you.
companies around for more than about 5 years should have “results.”
it’s the results that will show on the ticker, tomorrow, or the next day..maybe next year. but they will show up on the ticker, long after the glitter fades.

Posted under business

The prudent speculator will generally listen to what management states as goals.
Somwhere in the s3 there will be something about “we intend to make widgets. there are already widgets out there, and so we may not succeed. we expect to succeed because we have a new way to make widgets.”

Under sec law, random people may attempt to raise a $million under a 504, which functionally only needs to state the goals of raising a mil for some purpose to be later identified.

Generally, people become medical doctors to practice medicine, and people get nasdaq licenses in order to move stock on the nasdaq.

Interestingly enough, as part of the cloning/stemcell/corpsicle, infuse groundgog genes into the brain thinking of the collateral group around dr west of biotime, there is another hybrid:

:”One of the main goals this year for West is to get BioTime traded on either the American or Nasdaq stock exchange.”

http://www.insidebayarea.com/business/ci_12211685

The prudent speculator might think the main goals of a deeply in the hole biotec would be to develop product and revenue stream. That’s one of those antique ben graham ideas that the modern trader knows to avoid. the goal of a development stage biotech is to sell stock, even if it’s been a development stage company for 17 years; actually, especially then.

The prudent speculator might think that a ceo who doesn’t clarify for the press that a “purchase” of shares recorded in a 14d was actually the registration of shares granted as a penalty for failure to meet loan covenants, and as a result as at a basis of 0.

The prudent speculator might think that when the ceo, dr. west, states that
“We’re optimistic that we’re going to be handsomely profitable in a short while,” and is talking about a company that was required to tell the sec in a 10k that if it didn’t refinance debt and obtain further on april 15, it would not be able to continue operations, and told the sec in an 8k on april 17th that its net credit lines had not fundamentally changed, and had had to issue free stock as a penalty, that the “handsome profits” come from selling stock, not from doing biotech product development, especially if said cmpany had once before had a board member (ron barkin, former attorney) publicly state earnings estimates based on a mix if sheer fantasy (instant full market acceptance for off label use) that would be priced in violation of fda guidelines concerning pricing equivalent product.
barkin was gone shortly after that.
how much longer will dr. west and his secrets of immortiality be hanging aorund alameda?

Posted under business

According to biotime sec filings (btim.ob)

:”Current loans under the Credit Agreement bear interest at the rate of 12% per annum and will mature on April 15, 2009, at which time the outstanding principal balance of the loans plus accrued interest will be due and payable. Our ability to continue in operation depends on our obtaining a renewal of the Credit Agreement that will extend the maturity date of the loan and increase the amount of credit available to us.”

so, it is now april 16th. yesterday, the market reacted intelligently to the known facts (thew ones that deny the nonsense of obama= stem cells = west = btim biotime = $$$).

let’s compare this puppy to the largest commercial real estate fir in the usa:
:”"When we did not achieve the necessary amount of agreement on the bond solicitation, at that point we recognized that it was conceivable that we would not get the time outside of bankruptcy that we had hoped for to work on a restructuring,” General Growth President Thomas Nolan told Reuters.”

has biotime bothered to tell the 4500 or so shareholder anything about , generically, “how it’s going” ?
well. no.
that woiuld be silly.
they got the shareholders money. well, no..they didn’t.
the insiders got the shareholders $$$ by being able to short an open box; thereby regaining their risk capital and absorbing, steadily, all of the financioal advantage.
wo else benefits?
let’s go back to the mall bankruptcy:
:”"We will see a significant rise in delinquent and defaulted mortgages in commercial real estate above and beyond what we already experienced,” said Sam Chandan, president and chief economist at research firm Real Estate Economics”
this is something that might be less true in the swams near san francisco where biotime shareholders have spent a largish amount of money in a locked lease that contrbutes to real estate profits, not bodily health.

a fast look at an overly simple 5 day chart gives some clues:
http://finance.yahoo.com/q/bc?s=BTIM.OB&t=5d&l=on&z=m&q=l&c=

imho the fact that btiome could not successfully publish to the sec and the public the reults of the negotiations which it stated must be completed by april 15
says that biotime is playing a losuing hand and willfully misrepresenting itself to the “investor” who will fall for the pitch.
the prudent speculator will require some transparency, and stay away until that transparency is present.

Posted under business