Behind The Bid

23/08/2019

going full McAfeee

22/08/2019

Blue Horseshoe loves Anacott Steel

02/08/2019

Uncle Carl always wins. Always.

29/07/2019

Deal makes no sense to me 😬😬

22/07/2019

First $DDS and now $LCI mega squeezes. Which is the next one to pop?

22/07/2019

Lannett, the highest shorted stock on the Nasdaq, doing what Dillards did Friday. How will you trade this tomorrow?

21/07/2019

Get ready for the Monday penny stock pump 💪💪

21/07/2019

Dillards pigs getting slaughtered. Will you short pops on in Monday?

20/07/2019

What happens when the herd decides they don’t wanna overnight the Dillard’s new 30% borrow fee

17/07/2019

Every time a stock gaps down, do you think about picking up some cheap shares? Lets take a look at the June statistics of buying every stock that gapped down, and see if you you'd end up in the red or green.

To clarify what we're asking, let's look at an example from Box $BOX when they reported earnings on June 6th and the stock gapped down. (Pic 2)

In the case that you bought at the open and sold at the close you would have made a nice 11%. Is that common? Is it more common for a gap down to continue to fade or recover? If you bought every stock that gapped down, would you ultimately be green (made a profit) or red (made a loss)?

So to answer this question, let's take every stock that has gapped down in June over 10%, and pretend that we bought right at the open and sold at the close. That leaves us with 40 samples (Pic 3)

The biggest winner for this strategy in June was Aldeyra $ALDX whose stock gapped down -26% but then closed up 19.5% from the open. (Pic 4)

The biggest loser for this strategy in June was In InflaRx $IFRX whose stock gapped down -88% and closed down another -28% from the open (Pic 5)

So what do the final results show?

To measure the results, let's assume you put the same dollar amount into each trade. For simplicity, let us say you bought $10,000 of stock, regardless of the stock price, at the open, and sold the entire position at the closing bell.

The results would be:

[[...drumroll please...]

You would be DOWN -86.7% or -$8,670 over the month of June.

That's red baby.

The number of green trades is about equal to the number of red trades (19 vs 21), it's just that the red trades are much bigger in magnitude. For instance, there are 7 red trades over 10%, but only 3 green trades over 10%.

So when a stock gaps down, it can REALLY keep running down. At least in June.

17/07/2019

Francesca’s ($FRAN), the struggling womens' fashion retailer, got a big boost today after it was disclosed that an activist has bought 20% of the company. This sent shares 50% higher in the premarket before coming back down, with the stock currently trading only up 20%.

16/07/2019

Soliton reported highly anticipated results from its study on cellulite reduction on Monday, July 15th. In anticipation, the stock ran from $12 to $20, but on the day of, the stock closed down 15%.

Here's the daily chart (pic 2)

Soliton is a small cap medical device company that has an acoustic shockwave technology for tattoo removal called Rapid Acoustic Pulse (RAP). The treatment works pretty well, needing only 2-3 visits to remove tattoos vs the standard of care (lasers) which take about 10 doctor visits. They have also put a lot of press out about the potential of using their device for cellulite.

It's worth nothing that this was their second cellulite trial. The company presented their first trial results using RAP to treat cellulite on May 11 at the National Aesthetics Conference. They also went on Yahoo Finance Video to talk about the results (pic 3). The trial "succeeded" said management, however, the stock responded less than enthusiastically. See chart below (pic 4)

This first trial lasted 3 months and showed that patients reported an initial improvement on the cellulite severity score (CSS) ranging from 20% to 47%, with the average improvement being 29%.

This second trial was an update after 6-months and showed that the CSS average result was even higher at 31%.

I think its worth noting that there are only 5 people in the study (you mean to tell me you could only find 5 people with cellulite??), which I think adds to the underwhelming feeling of the results.

So the second trial results were pretty much the same as the first trial results. Unless these results were truly exceptional, it makes sense that we would sell off, just like we did last time. Just like almost every stock which has a run into an event usually has a sell-the-news selloff.

What do you think, dear reader? Is Soliton a buy? Or better to wait until a larger study? Leave your comments below.

16/07/2019

Blue Apron running wild after its 15-to-1 reverse split and today announcing that it will sell Beyond Meat fake-meat in its meal prep kits. We covered this all on the premarket show.

15/07/2019

Capricor Therapeutics $CAPR, was a wild stock today, gapping up 100% and pushing up another 20% before closing up 93% from yesterday's close (2nd pic)

Opinions were divisive on this nanocap stock, who reported results for its drug CAP-1002 in a small study called HOPE-2 in patients with Duchenne muscular dystrophy (DMD). DMD is inherited disorder in boys that causes progressive muscular weakness.

CAP-1002 has been a drug that Capricor has been trying to find a use for for some time. In 2017 the drug failed its Phase 2 trial for the treatment of heart attack and heart failure. They then repurposed the drug for use in DMD.

These were the first results from the HOPE-2 trial for DMD. The precursor HOPE-1 (Phase 1) clinical trial for DMD started in late 2017 and data came out in 2018, and investors were less than excited (3rd pic)

Today was the first day for any results for the HOPE-2 (Phase 2) trial.

I said on the Premarket Show that the results, to me, at first glance, looked quite good

In a press release, the company claims "positive" results for its drug. The study had 17 patients who were analyzed 3 months after treatment and 12 patients were were analyzed 6 months after treatment. Success was determined based on upper limb strength, grip strength and tip-to-tip-pinch strength. These results were given statistically in terms of p-values. (4th pic)

These results were quasi-statistically significant, as they border on the p-value of 0.05. considered the trial a fail (5th pic)

In the middle of the day, the stock got a price target upgrade from H. C. Wainwright to $12.40/share. They cite the trial results as positive, although H. C. Wainwright has been known to put ridiculously high valuations on small an nano caps recently.

At 1pm ET we got some color from StatNews Biotech journalist Adam Feuerstein, who called this press release "clinically meaningless" due to its small sample size of patients (6th pic)

Here's the chart again after factoring in all the day's events (7th pic)

15/07/2019

Penny stock profile of the day. Capricor Therapeutics $CAPR. Stock gapping up 100%, now what? Leave your comments below

14/07/2019

Companies undergoing reverse splits have certainly gotten traders' attention, especially if that company has news. The theory goes with a smaller float, there are less available shares to trade, which certainly gets the attention of the many, many small cap chatrooms and retails traders worldwide, who look to jump into the stock and sell it a few minutes later at an inflated price.

A great recent example of this was Camber Energy $CEI which underwent a 20-to-1 reverse split on July 2nd, and then 6 days later announced the closing of a previously announced merger agreement with oil & gas services provider Lineal Star Holdings. Again, this was a previously announced merger (i.e. the merger was already back in February), but this piece of recycled news sent the stock flying. (2nd Pic)

That's right, the news was already know, this is what traders call recycled news.

A common example of recycled news is when a biotech announces drug results, and then later issues more press releases talking about those same drug results.

We are going to take a look at an example of this with ARCA Biopharma $ABIO.

ARCA Biopharma $ABIO is a biotech with a drug for atrial fibrillation (irregular/fast heart beat) caused by a genetic mutation. Their drug, Gencaro, had some results from its Phase 2 study GENETIC-AF published in the JACC: Heart Failure on May 1st, which send the stock flying. (3rd Pic)

But that's not the whole story. These results were already very much known. These Phase 2 results were actually released over a year earlier in February 2018. The drug's effectiveness did not impress investors and dropped the stock 72% on the day they were published.

So what happened?

Well, $ABIO had just completed an 18-to-1 reverse split less than one month before its mammoth run on April 4th. So we can speculate that a combination of this reverse split + recycled news caused the stock to rocket.

What do you think, dear reader? Are you convinced that a reverse split + recycled news will continue to rocket stocks in the future? Leave a comment below.

13/07/2019

Friday we saw Stitch Fix $SFIX gap up 7%, as Goldman Sachs upgraded the stock to a Buy and slapping a $38 price target on the stock (the stock opened at $30/share). Stitch Fix, the online clothing recommendation engine, has been a battleground of late, as investors are not sure whether to value it like a high growth tech company (which would command a high multiple) or a clothing retailer (which would give it a much, much lower multiple).

As such, the company has a large horde of bears in the stock, and carries a hefty 25% short float.

Here's how the stock performed on Friday after its 7% gap up (2nd pic).

Wow what a fade!

So does having a very high short float have anything to do with this gap up and fade?

The logic would go something like this: When a stock with a high short float has good news, the weak hands run to cover, causing the gap up. However, there are not enough natural buyers to keep the stock rising higher, so we eventually fade back as sellers outnumber buyers.

Well that's a nice theory, but what does the data tell us?

Let's look at some example of stocks that gapped up in June that had short floats of over 15%.

Here's Restoration Hardware $RH that gapped up 23% on earnings and has a short float of 33%. (3rd pic)

Here's Dova Pharaceuticals $DOVA which had a gap up of 35% on receiving a sNDA (expanded use for its drug for thrombocytopenia) with a short float of 40%. (4th pic)

Here is the full sample of the 8 stocks that gapped up over 15% and had a short float over 15% (5th pic)

This limited sample shows an average of -2.5% day change from opening gap, with 75% of them "gapping and crapping". This certainly looks significant (but again, this is a small sample).

What do you think, dear reader? In a future article we can certainly add more samples to see if the pattern holds.

12/07/2019

S**Cs (special purpose acquisition companies) have certainly been in the spotlight recently, as Sir Richard Branson's s**ce tourism Virgin Galactic is going to be using one to go public, and Akerna $KERN a medical cannabis stock had a 500% 2 day gain after they reverse merged with a S**C.

Today was the end of a 3 day run in Thunder Bridge Acquisition, another hot S**C that went from $10 to $18. Here's the chart.

So what happened?

Thunder Bridge Acquisition $TBRG, a "blank check" company was formed by Monroe Capital who raised $225 million in 2018 with the sole purpose of acquiring a FinTech business.

In January, Thunder Bridge announced they would merge with REPAY, a payment processor that focuses on larger transactions such as personal loans, auto loans and other big-ticket payments, and growing at a 42% annual rate.

So why if REPAY was a good company would they go public via a S**C and not an IPO? Well, as we see, this is becoming more of a norm and avoids the high underwriting fees and roadshows associated with an IPO. However, going public via S**C oftentimes goes overlooked by analysts and institutional investors, so this can be good news for retail investors.

On June 20, Thunder Bridge set the shareholder meeting to vote on the merger as July 10th. The next day the acquisition closed and the day after the the new company was listed under its new ticker $RPAY

Here's a tweet from who totally traded it excellently.

"Stocked up on $TBRG for merger Wed/Thurs when the ticker becomes $RPAY . Looking for a $KERN type run... Out of all other swings except long AFH calls and a few WMT puts. 👀 on AWSM ."

What do you think? Will you be tracking future S**Cs? If you're ready to start the website s**ctracker.com with me, leave a note in the comments.
**c

12/07/2019

Four stories for your premarket

11/07/2019

Today, Heico, the 18 billion high-flying aeros**ce company, got a double downgrade from investment bank Bank of America / Merrill Lynch. The analyst took his rating from a Buy to an Underperform, saying that it is trading at an "unprecedented valuation" and he see more risk due to below average air traffic growth year-to-date. The analyst kept his $105 price target on the stock (the stock currently trades for $135).

This certainly sounds pretty bad, here's how the stock performed today (see Photo 2)

Looks like buyers were more than happy to buy this gap down today on the analyst's fears.

This got me wondering, how have other double downgrades performed?

Here's Big Lots $BIG on June 3rd, 2019, the day after it reported earnings and got a double downgrade to sell also at BoA/Merrill (see Photo 3)

Well, looks like that dip got bought too.

So that's a few examples where the stock either barely responded or eventually rebounded.

Most of these double downgrades were valuation calls, the analyst basically saying that the stock has gotten too expensive. But hey, we're in an expensive market right now. If you want to own high flying stocks you're going to have to pay a premium (ahem Zoom $ZM, Slack $WORK, Beyond Mean $BYND trading at 40x sales). So it makes some sense why valuation calls would not bring out enough fear in investors to sell.

But what if the double downgrade has to do with something intrinsically wrong with the company?

Here's CannTrust $CTST, who got in trouble with the Canadian government over its regulated cannabis and on the same day got a double downgrade from BoA/Merrill due to concerns that the government may pull its license completely.

That one certainly sold off and hasn't recovered yet.

So in summary, I think we can say that tracking double downgrades may be an edge, but not a reason to blindly short any stock.

11/07/2019

Everything You Need for your Premarket at a Glance

Gm traders. Wow lots of gappers all over the place

11/07/2019

4 stories for your premarket

10/07/2019

Vislink has a completely wild day as this nano cap worth only $3.6 million got a $2.8 million contract with the U. S. Army today, gapping stock up 300% before it came crashing down to close at only +150%. Here's the chart: (2nd pic)

Vislink makes communication devices, think walkie-talkies and wireless video transmitters. They have been working with the military for some time, and today announced a $2.8 million order from the U. S. Army.

But for all intents-and-purposes, this is a non-event. The company brings in revenues of about $37 million, so adding another $3 million is not really going to move the needle, especially considering the company has $9 million in debt.

Traders, however, wanted something to chase after the spectacular move in Oil & Gas company Camber Energy $CEI which ran bell-to-bell over 200% on also a non-event news item. Here's what happened to $CEI yesterday. (3rd pic)

So it was not surprising that most traders on Twitter were trading and betting short.

Personally, I thought the stock would fall immediately out of the open and fade all day. It didn't. Here's an example of playing it safe, with great ex*****on (4th pic)

In future articles, we'll go over some more properties of penny stocks gapping up over 100%. Stay tuned.

10/07/2019

5 stories in the stock market today. Are you trading Vislink $VISL today?

10/07/2019

Premarket Breakfast for Wednesday, July 10th

Gm traders. Big headliners are Levi's reporting earnings for the first time since its IPO

09/07/2019

How Many All-Day-Runners were there in June? Any Why?

In honor of Camber Energy $CEI, the nano cap stock that ran bell-to-bell and closed up 268% today, on news that they closed an acquisition of that was previously announced way back in March, I got to wondering. CEI 1 minute today, on news they closed an previously announced acquisition How often do....

09/07/2019

Here's everything you need for your premarket at a glance

Gm traders. Quiet so far but things always pick up closer to the bell

08/07/2019

The Preannouncement, One of the Most Powerful Catalysts, Ever. A Soliton $SOLY Case Study

Today was a massive day for Soliton $SOLY, a medial device company, closing up 61%. This small cap company uses acoustic shockwave technology for tattoo removal, and hopefully one-day, to treat cellulite

08/07/2019

We cover 4 stories for your Premarket

08/07/2019

Everything you need for your premarket, at a glance:

Gm, hope you had a great July 4 weekend. Here's what's gapping