Puma Biotechnology $PBYI Could Double by the end of May

pbyiAs #PumaBiotechnology $PBYI nears an FDA advisory panel meeting for its breast cancer treatment candidate #neratinib, #Citi argues that a recent hiring push by Puma signals its confidence in securing approval, an event which the research firm says could send shares soaring by 100% or more.

BACKGROUND: The FDA has scheduled a May 24 Advisory Committee meeting for Puma’s neratinib in extended adjuvant treatment of “HER2” early stage breast cancer. In its Q1 earnings report last night, the company confirmed that “we look forward to presenting” at the May 24 meeting. #HER2

CITI SEES POTENTIAL DOUBLE: In a post-earnings research note, Citi’s analyst highlights that Puma accelerated plans for final five-year data from the ” #ExteNET ” neratinib trial to Q2 from the second half, as it will be used during the drug’s May 24 #AdComm. The analyst confirmed with Puma that additional data from the “CONTROL” prophylactic trial will also be presented at the meeting.

Notably, the analyst says he “noticed” that Puma appears to be actively hiring for commercial operations, with the company’s website now showing 18 job listings for roles within outreach, commercial supply chain, market access, reimbursement, and other areas. Though critics may interpret the news as signaling that Puma doesn’t expect to be acquired, the analyst counters that such an argument “doesn’t work too well tactically,” as the stock should gain at least 100% on what he calls an “expected positive” AdComm.

Indeed, the analyst views the hiring push as “obviously reflecting confidence” in approval while both maximizing future sales potential and remaining open to future strategic options, with the analyst reminding investors that Puma CEO Alan Auerbach successfully sold his last company to big pharma.

PRICE ACTION: Shares of Puma Biotechnology are up fractionally to $30.75 in afternoon trading.

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Reverse Stock Splits Destroy Shareholders Value

Reverse-stock-split-thumbnail#NYSE and #Nasdaq are the two major stock exchanges in the U.S.  Both exchanges require stock prices that are traded on their platforms to have a price of one dollar or higher. Stocks that fall below this threshold are delisted. These stocks are then moved to other exchanges such as #OTC or Pink Sheet #PinkSheet which have very low liquidity.

In order to avoid this, companies with sub dollar share prices reverse split their shares. In finance, a reverse stock split or reverse split is a process by which shares of corporate stock are effectively merged to form a smaller number of proportionally more valuable shares. A reverse stock split is also called a stock merger.

If a company has 10 million shares that are trading at $1, it can declare a 1-for-5 reverse stock split. Theoretically, the book value of the company remains the same instead now the company will have 2 million shares that are trading at $5 per share.

Higher share prices however, do not necessarily mean better stock fundamentals. The higher share price, following the split, has now simply masked the company’s declining fundamentals, and market’s view of the company. The higher share price now allows short seller to short the stock although it would be harder to find shares to borrow but this is offset by those investors who give up on the stock and sell at any price.

Below are several examples of such companies:

  • Pain Therapeutics $PTIE engages in developing drugs and focuses its drug development on disorders of the nervous system, such as chronic pain. The company recently declared a 7-for-1 reverse stock split. Shares were trading at 59 cents.


  • #NeuroMetrix, Inc. $NURO develops and markets products for the detection, diagnosis, and monitoring of peripheral nerve and spinal cord disorders. The company recently declared an 8-for-1 reverse stock split. Shares were trading at 48 cents.


  • Rex Energy $REXX is an independent oil, natural gas liquids and natural gas company operates in the Appalachian Basin. The company recently declared a 10-for-1 reverse stock split. Shares were trading at 42 cents.


  • #Rubicon Technology $RBCN is a materials provider focusing in monocrystalline sapphire for applications in optical and industrial systems. Co. designs, assembles and maintains its own proprietary crystal growth furnaces to grow sapphire crystals. The company recently declared a 10-for-1 reverse stock split. Shares were trading at 82 cents.


  • The mother of all reverse stock splits award should go to #DryShips $DRYS . DryShips Inc. owns and operates ocean going cargo
    DryShips stock over the past 12 months

    vessels worldwide. The company has reverse split its shares seven times over the past thirteen months at the expense of its shareholders. The last split was today for 7-for-1, the one before that was in April for 4-for-1. The one prior to that was in February for 8-for-1. This puts the 52-week trading range for this stock at (this is not a typo!) $4.55 to $37,900.80. Shares last traded at $5.35.



Snap just snapped $6 billion from investors

snapSnap, home of the disappearing photo messages, just managed to disappear more than $6 billion from its market capitalization. Shares are down more than 22% in Thursday trading after it reported its quarterly results.

A number of analysts have commented on the company’s results, some upgrading while others are downgrading the stock. In any event, shares are down sharply.

On May 10, #Snap $SNAP reported slower revenue growth and a bigger loss than analysts expected. Its $2.21 billion loss or $2.31 a share was $1.10 higher than the loss expected

That 36% sequential increase in revenue to $149.6 million fell $8.7 million below the consensus and below the 53% growth it enjoyed in the same quarter of 2016. To make matters worse, Snap’s average revenue per user fell 14.3% from the previous quarter to 90 cents on a 36% boost to 166 million daily active users.

#Facebook $FB is eating Snap’s lunch. In April, Facebook’s Instagram said it had “200 million daily users of Instagram Stories, a feature of the photo-sharing app that mimics Snapchat’s popular function,” according to the WSJ.

Users say they prefer the Facebook feature. 25% of respondents in an April survey of 3,000 Americans prefer Stories on one of Facebook’s platforms — 13 percentage points more than those who said they like Snapchat’s Stories better.

Many investors blame the company’s CEO and his lack of maturity as the main reason for the company’s misfiring. Others believe they are paying for the CEO’s education. Even CEO’s conduct in Snap’s May 10 conference call reflects the most frightening issue for investors in its stock. Thanks to the voting control of CEO and CTO who hold nearly 89% of its voting power, investors in its shares have no recourse but to pay the tuition for the CEO’s on the job training.

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Calpine is in-play below $16

CalpineThe Wall Street Journal reported yesterday that #Calpine $CPN , the largest power producer, is exploring a sale.
#Deutsche Bank sees few strategic acquirers for Calpine (CPN), making going private or remaining public the most likely outcomes in the analyst’s view.
Market power issues in #Texas make a combination with Vistra Energy $VST or NRG Energy $NRG unlikely, and while #PSEG $PEG and #Exelon $EXC could afford buying Calpine, such a deal would be a shift in strategy for both.
The analyst finds it unlikely that a go-private deal gets done much north of $16 per share.
The analyst believes, however, that a mid-teens per share takeout is possible “with some creative structuring.”
Even without a deal, Calpine offers value based on its cash flow profile, Deutsche contends. The analyst reiterates a Buy rating on Calpine with a $14 price target.
The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Moody’s Lowers its view of Canadian Banks

canada-banks#Moody’s Investors Service downgraded the #Baseline Credit Assessments (BCA), the long-term ratings and the #Counterparty Risk Assessments  (CRA) of six Canadian banks and their affiliates, reflecting Moody’s expectation of a more challenging operating environment for banks in Canada for the remainder of 2017 and beyond, that could lead to a deterioration in the banks’ asset quality, and increase their sensitivity to external shocks.

The banks affected are: #Toronto-Dominion Bank $TD , Bank of Montreal $BMO , Bank of Nova Scotia $BNS , Canadian Imperial Bank of Commerce $CM , National Bank of Canada $NTIOF , and Royal Bank of Canada $RY .

The BCAs, long-term debt and deposit ratings and CRAs of the banks and their affiliates were downgraded by 1 notch, excepting only Toronto-Dominion Bank’s CRA, which was affirmed.

The short term Prime-1 ratings of the Canadian banks were affirmed.

All relevant ratings for these banks continue to have negative outlooks, reflecting the expected introduction of an operational resolution regime in Canada.

“Today’s downgrade of the Canadian banks reflects our ongoing concerns that expanding levels of private-sector debt could weaken asset quality in the future. Continued growth in Canadian consumer debt and elevated housing prices leaves consumers, and Canadian banks, more vulnerable to downside risks facing the Canadian economy than in the past.” said David Beattie, a Moody’s Senior Vice President.

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