Ah yes, the liability will not have to be paid most likely. On TIKR it showed as debt. Not a lot of margin of safety though. You think the remaining IP is worth much?
Ha me neither. That is why I always want any pharma assets for free. I treat them like free lottery tickets and mainly focus on the cash value that can be realized for minority investors.
do you have any information on how these net cash biotechs w/ activist involvement have performed historically? Additionally, are there any "green" flags you look for that have improved the odds of a successful outcome for shareholders?
I think it depends on at what stage you are buying them. How well you can do depends on figuring out the game theory + buying at a sufficient discount to likely net cash value 6 months to a year from now. And avoid buying before a reverse merger is announced, they often don't go well.
Clarkstreetvalue blog has been doing them all year btw, so check out his blog to get an idea how some of them will play out.
I've followed his blog for a while. From anecdotal evidence it appears that in most instances, management is deeply entrenched and does something in their interest. Also by the time a reverse merger is announced the stock usually drops.
Yes I think if institutional ownership is too low and cash balance around a $100m+ the risk of a reverse merger is significantly higher. And you don't want insiders with already shady reputations.
What do you think about Galera GRTX ?
I only bother with biotechs that have a negative enterprise value. I want to get any proceeds from sale of IP for free.
I understood that Galera GRTX is one of such cases (negative EV)...
Ah yes, the liability will not have to be paid most likely. On TIKR it showed as debt. Not a lot of margin of safety though. You think the remaining IP is worth much?
They claim it is worth a lot but I do not have enough knowledge to judge.
Ha me neither. That is why I always want any pharma assets for free. I treat them like free lottery tickets and mainly focus on the cash value that can be realized for minority investors.
I sold Rain Oncology. $1.16 + CVR seems to be final deal, so $1.2 seems like a good price to exit.
do you have any information on how these net cash biotechs w/ activist involvement have performed historically? Additionally, are there any "green" flags you look for that have improved the odds of a successful outcome for shareholders?
I think it depends on at what stage you are buying them. How well you can do depends on figuring out the game theory + buying at a sufficient discount to likely net cash value 6 months to a year from now. And avoid buying before a reverse merger is announced, they often don't go well.
Clarkstreetvalue blog has been doing them all year btw, so check out his blog to get an idea how some of them will play out.
I've followed his blog for a while. From anecdotal evidence it appears that in most instances, management is deeply entrenched and does something in their interest. Also by the time a reverse merger is announced the stock usually drops.
Yes I think if institutional ownership is too low and cash balance around a $100m+ the risk of a reverse merger is significantly higher. And you don't want insiders with already shady reputations.