Also, I will try to respond to a number of requests that I've received via email or comments to the board asking for 'VFC's Take' on stocks that readers have found. While I'll do my best to address as many as I can, please take a few things into into consideration while reading:
- I have not thoroughly researched all of the stocks that I'm about to comment on. I've done the initial DD but my opinions are mostly based on my first impressions of the stock. I'm merely providing VFC's Take, as requested. Use that as a starting point to do your own DD.
- Don't get testy if I don't like your stock. Remember, this is just my initial impression and I take into consideration some variables that other people don't, that's why 'VFC's Take' is not always the mainstream impression.
- I appreciate all the recent feedback, and keep the stock tips coming; this is a great forum for all investors of all levels to share tips and insights. There's a whole lot of stocks out there, but there's only a few gems. Let's keep trying to find those gems.
SPNGE: An email from Jon regarding SpongeTech:
I'm not sure how to do the blog thing yet but I'll learn, hence this email to you. Meanwhile, I like you, are long SPNGE and am curious of your opinion of what's going to happen to the stock, especially with the trading suspension, the potential class action lawsuit filing, etc. Unless management is totally lying about everything all my DD indicates it's should still be a viable stock to make money in. Your take, please, on the impact of all the recent news...should one accumulate more shares at the end of the trading suspension? Or get out totally?
I appreciate your incite in your blogs as you seem to be like the rest of us little guys just trying to get ahead.
Thanks,
Jon
VFC's Take: As far as whether to buy the stock or not when trading resumes, I will take a wait and see approach. My view is that while the stock has been halted, sales of the company's products have not halted so i see no reason why this company cannot recover after all the finance fiasco is said and done. There are those that will be quick to sell with all the lawsuits and financing drama still on the wires, so a further drop in price is definitely a possibility.
However, the slew of lawsuits that were recently filed wouldn't scare me away from the stock because there is nothing more American than filing a lawsuit; it's a matter of them proving that the SpongeTech investors intentionally did something wrong. The one lawsuit that I am interested in seeing the outcome of is the trademark infringement lawsuit that was filed against the pretenders in California.
I'm going to wait and see what the stock does upon the resumption of trading. If it ticks to the upside, then I'll hold. If it dips, I'll probably add a few more shares. If it dips significantly, I'll add even more because the lower the stock goes the, better it will rebound if accurate sales figures show real growth.
All just my opinion, base your final decision on your own DD.
Disclosure: VFC is long SPNGE.
PPHM: A comment from Kenneth regarding Peregrine Pharmaceuticals:
Dear VFC,
I was wondering what impact the reverse stock spilt would have on the stock price of Peregrine Pharmaceuticals (PPHM). Have really enjoyed reading your posts daily and always appreciate your input.
Many thanks,
Kenneth
VFC's Take: On Monday, October 19th, a one for five reverse stock split will take effect for PPHM, meaning that investors will receive one share for every five in their portfolio. The market cap remains the same in a reverse stock split, but because there are a reduced number of shares on the back end of the split, the share price is higher. The value of the shares (as per market cap) remains the same.
That was a brief recap for the new investors who may not be familiar with the reverse split.
Many times a stock price will decline after a reverse split, and that may very well be the case with PPHM. The company has nothing in late stage trials and there is no news pending, that I am aware of, that would boost up the share price post-split, so I am fully expecting a decline next week. I am also expecting that I will continue my accumulation of the stock.
While still in early stages of development, Peregrine's Bavituximab with its tumor fighting capabilities, holds quite a bit of potential in the Oncology market, in my opinion. The company is also developing Cotara to treat patients with "high grade brain cancer".
In addition to using Bavituximab to stimulate the immune system to fight cancerous cells, the product is also being investigated for its effectiveness in fighting various infectious diseases.
Because of the above-outlined potential of Peregrine's products, I will continue accumulating the stock, especially if we see a nice price cut after the reverse split takes effect.
The only event that would make me think twice about continuing my accumulation is if there were bad news from the pipeline released in accordance with the RS. If that were the case I'd have to digest the news and then consider whether or not the stock was still worth accumulating.
If you're investing on the potential of the pipeline, and nothing regarding the pipeline changes, then I think that the RS is a non-factor and my give investors a discounted price to buy.
All just my opinion.
Disclosure: VFC is long PPHM.
3 COMMENTS:
Hi VFC
As always, your comments are very instructive, and I have told you many times how I´m learning a lot from your sharing. Sometimes when I read your comments about your past experiences (or inexperience) I understand that if I hadn´t found this blog I would have kept making the same mistakes and I would have run out of money very quickly.
I have some fun anecdotes (well no so fun, I lost a lot of money), one of them is regarding to the reverse split (that you have explained some comments below), I used to have some shares of AIG,at first when it did a reverse split I didn´t know what it means, so I saw the value of my shares many times higher, I remember being just celebrating because I multiplied the amount of shares that I had bought with the following reverse split value. Well, as you have said, after a reverse split the value usually drops, and it did, so finally my happiness end when I realized that the amount of shares were twenty times lower, and I had lost a lot of money because it had dropped a lot (no more champagne for me).
Well I just wanted to share my INEXPERIENCE, and tell you one more time how much I have learnt and how much I appreciate that you share your knowledge, it is priceless.
Even when you have told us many times that you don´t do this for money, and when personally I like very much the idea of charity, I still feel that I owe you, so I wonder if would help you at least with a penny if I click the adds that you have on the blog (Don´t get me wrong, I know that a penny is not enough and doesn´t represent what I think would be right, but I could do it every day, after all, in a week I would be "paying" you with the cost of a share of Biel, wich if you are patient, you will be seeing it increasing many times =P )...
Thanks for your time... in this oportunity I wrote just to say to all good luck and have a good weekend!
Ale
Hi Vinny,
Alejandro has touched on something for me as well .... I have been investing since the 1980's and been making the same mistakes! I also feel I owe you something (besides all the beers or champagne - if we ever get a chance to enjoy a few).
Have a great weekend,
Lenny
I have to say, SPNG has me completely baffled. I really thought the 10-k was going be filed by Friday, and the sales numbers would be verified. D&T backing out is a red flag to be sure (even though we have no idea what their motive is to do so, PR issues, etc.) Now the company is running the risk of a serious PR backlash, and that could get them caught in a downward spiral with regard to sales and marketing. If they don't get the financials cleared up soon, this is not going to end well.
Scott
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