Baltbear on Finance markets are like marshmallows

people hunting your $$ will be bragging about stem cells all september.

watch your wallet.

Posted under business

someone recently asked me to analyse a d/e swap.

let’s start real simply: hoe much money was orgianlly on the table?  the filing refuses to say.

did the company pay a fee for getting the d/e swap done? yeah..about $1/4 mil. were the financers feeling pressured to act while tey still had a chance to get in on the “next big thing?” first, they insisted on being paid $1/4 mil for the privilege of letting the debtor off the hook. next, the execution price was about 1/2 the current mkt trading price…. 1 13/16 vs 3 1/4 for the people chasing after the insiders, thinknig they will benefit.

do the financers have the best possible dd? yeah.  and they say 1 13/16… after being paid to take the deal.

a what point can they sell and be at pure profit? current mkt. except for one thing: the shares are not yet on the shelf.

will the company pay the registration costs? yup.

when can the financiers sell for teir best advantage? since tis company’s ce has publicly statedthat the primary goal is to get to $4–not to engage in the biz plan– $4 is probably coming. at that point, the financers can short from a box, or provide the borrow to shorts for 10-15 basis points.  further, they can hypothecate to themselves right now… and short anything above 1 13/16 for pure profit.

in addition the financiers were granted warrants striking @ 2.  so, with  a listing on  a nat mkt coming 90 days after 4, thse same unidentified financiers can sell all day long, and whenever they actually need to cover (this puppy is famous for delays in delivery) they deliver at out of pocket of 2.

those are the negatives.

the positives? for the first time in 12 years this company has 2 years burn on hand. thy have further funing coming to sustain their claimed r&d budget. they have publicly stated in filings that they will not do any of the grant p[aid r&d, r&d until the ckecks clear the bank, in spite of haing bragged about getting the grant some minths ago.

this leaves the entire cash on hand available for g&a and public relations.

the logical question for the prudent speculator is “how to trade this puppy??”

trading for a basis below 1 13/16 is obvious. knowing there is overhang waiting @ 4. know that it is tightly held, so, when shorts hit it harder than the insiders want, a bear trap will execute.

know that a couple million shares of phony volume will be be created as off the shelf share get regisetered, since the co has a history of doing this.  sliding into that space may be profitable.

what’s the ticker??? btim:ob.

caveats?? yeah. these guys have accumulated $4-6 mm…at prices 1/16- 1/2 of the mkt trading price, and a reaonable competitor with plenty of cash on hand has spnt $60mm cash preparing to make sure the above stock stays a niche player. next caveat?? those who talk the most about the stock have no idea what the bizness plan actually is, or the industry inhich it resides, and cannot tell the difference bwetween laboratory supplies and approved pharmaceuticals. and have further, no idea on how te fda reacts to approving things other than drugs mfg’d by the majors. for the last few days i have been busy with an iso problem necessary as part of an eeu approval for a medical device. why in europe?? because it is so much easier than dealing with the fda.

so, there’s a ticker, btim:ob…which when not being hyped trades between 25-40k a day…but appears to have much higher vol becuase of games with registration. it has 2 years burn in the bank, no real debt, and r&d budget being paid for the state of california….when california has money…. and some heavy duty pkayers in at a basis between 0 and 1 13/16… to get a “real” price of 4 that is sustainable, it needs to pridice about $300k a year from selling stem cells, carry a 100 p/e (disregarding r&d spending) and is majorly owned by someone who believes in take unders.

how would u play it???

leave a comment…

Posted under business

another part of doing some “fundamental analysis” on a story stock is to check out the styles of those who like the stock.

Are they mindless hero worshipers of the ceo?

Do they assume any questions that will produce a rosy than rosy answer are part of a plot by shorts to kill the stock? (and note: i am all in favor of shorting being massively constricted in the mkts, by the simple expedient of having the short interest be reported witin 20 minutes of real time. the existence of the uptick rule proves that the knowledge is available).

Do thy engage in personal attacks rather than talk about the ticker, the filing or the biz plan?

then you can assume they are either ignorant dumbbutts, or they are being paid by some firm pushing the stock.

intelligent people will always find reas if disagreement. if someone tells you there can be no disagreeing about their stock’s msft like future, then you dd tells you that only idiots and con men want it traded.

Posted under business

somebody asked me, on a random stock board
what books ti read to get better at reading an sec filing, and doing actual fundamnetal analysis.
using a case in point, i replied,

sec.gov.
reading filings.
on f/a..grahame&dodd…… sigh.
which will tell u to not get near btim, et al..so does not apply.
as i have said before, this is a “story stock”..and the dd is thence all about the story.

u are telling one to urself about future earnings. i am looking for a basis for such that can be measured (in f/a terms) plus some insane multiple to allow for hype.
(peter lynch tells the story of in the late 80’s going to japan over and over, looking to invest there..and always seeing evvvvverything overpriced.. and still going up… but then, one fine day, or 1/4…
http://finance.yahoo.com/q/bc?s=%5EN225&…
whatever u can find by lynch will be eminently readable. and whatever u can find by either adam smith, or that matter, das kapital (u probly want the translation…:-) ).
within those contexts:
1: why does btim keep frontloading filings? (giving data for periods after the reporting period).
2. why does btim not state, transparently, terms of financing?
3. why does btim keeeeep using warrants?
4. why is the patent estate not identified in filings?
5. how many units of cells must be sold to meet g&a, and cog? (i’m ignoring r&d)
what is the present mkt for such?
what is a reaonable growth rate in that mkt? 40% y/over/y? 60%
how come?
who are the cmpetitors?
can they indercut the price?
what >unique< advantage does btim have?
what s mangemtn’s track record at creating value for shareholders?
what is the track record of failures??
(failure is not a problem by itself…annny “story” stock will have plenty.
what do the >filings< ..not the press, say about that?
this entry is not about btim:ob.
it is about how to think about what you hear.
right now, i am sitting sipping some “expensive” coffee–that is, expensive in comparison to the rancid garbage from a folger’s can. this stuff retails for $27 a pound. how does it do that? by having desirable qualities that other coffees do not. it has a niche, which has grown, and can be supplied consistently.
any stock you are told about, no matter what the sector, intends to fill a market in a definable niche, in a better, more cost effective, or more widely distributable way.
if the filings and the company history do not show growth towads defined goals faster than the price is growing, it’s overvalued.
it might be a whore stock to trade. you might get affectionate about it, and want t take some home.
before u do, check for crabs. “crabs” in this case include terms like “about to” “beginning” “development stage” and most important…”debt.”
as the events of the last year show, debt does not go away.
debt/equity swaps are great…if u are on th low sde of the basis in your own postion. nothing to be afraid of. it showsthe financers still beleive in the ticker.
ever heard of rand mcnally? sure you have. for about 1/2 a century it was traded on the pink sheets. thus, if a ceo says a biz plan goal is to get onto a major exchange–be wary.
if the stock can’t get above 4 based on revenue potential seen by a broad market, what is the ceo going to do??
hehe…you don’t wanna know…or actually, you do, since u will either be able to trade the media game, or get traduced by it.
sec filings are in plain english. if they don;t seem like it, be careful.

Posted under business

last november 8,
i posted this artulce, setting yp the most immediately “shovel ready” revoceryt program possible:
http://baltbear-on-finance.com/the-10-cent-solution-for-gm-f-etc.
that article was forwarded to a number of congresspeople, including nancy pelosi, by regular readers of this blog, which was begun, among other reasons, precisely to get suystainable trhinking into the marketplace instead of hype.
a very watered down version of the 10 cent solution passed congress and immedately led to serious success at improving fuel economy, market economy, and revitalising main street and the assembly lines that run 10% of the usa economy.
what did not pass was the anti-gimmick, no free lunch portion of the porgram:
a 10 cent a gallon federal tax to be used to actively fund he program, and make the rebates (currently $4500) truly meaningful–like $8k meaningful–so hat more members of the general economy could benefit.
tell your congressman, now that another $2 billion is going into this plan that you want to see it funded permanently, realistically, not gimmickally.
gasoline prices are back in the $2.50 range in my travels, which indicates according to my charts, a bottom forming in the overall econ. that bottom, can be broken, and will be, by any other oil shock. gentle pressure on oil demand, and strong relief for oil demanders will make a difference.

Posted under business