How’s the stock market?

[sussle]

SAVE - this train is leaving the station.

Spirit Gets an Upgrade. Even if a Deal Doesn't Happen, the Stock Still Wins.

The hopes of a merger should shield Spirit Airlines from the pressures currently facing the industry.

www.barrons.com

 

[casa_mugrienta]

SARK!!!

 

[Northern_Shores]

OIL <3

 

[PRCD]

Read this article, https://rapport.bio/all-stories/the-way-through-the-biotech-downturn

Basically, the point is that many companies are trading below book value. Some of these firms suck, and are never going to make it. Close the company and return value back to the investors.

Point 2, there are too many stocks, some need to be culled. Companies at low valuations are going to get squeezed. The burn rate to cash ratio is not appealing to reluctant investors at this time, causing further price declines. We're talkin bout corporate raider 80's and 90's style buy and close actions.

FTA
The problem is when a company’s valuation drops to such a low point that the amount it will need to raise is a large amount relative to what investors already hold. A $1B market cap company burning $100M/year that wants to raise two years of cash is only asking its shareholders, who collectively own nearly $1B (whatever employees don’t own) to come up with 20% more to support their value proposition. But a $100M market cap company burning $100M/year would need to ask its shareholders to triple down.
...
However, the problem with our dataset is that, historically, there have been very few cases of companies trading down to levels where they had a very high burn-to-market cap ratio absent a clear R&D failure as the cause. But today, we have a fairly large number of companies burning more than their entire valuation, many of whom might feel like they haven’t really deviated from their R&D premise and have the same probability of success as before.

As of this writing, out of 477 development-stage public biotech companies, there are 52 whose annual burn exceeds their market cap, of which we estimate 22 will need to raise in 2022.
...
The lower a company’s valuation, the smaller the position that company represents in the portfolios of its shareholders, therefore the lower a priority it may be for them, and therefore the smaller the supportive “fan-base” the company may have when it seeks more funding.
...
Those companies that can’t exit their spiral might cross down into valuation ranges that attract a different kind of shareholder: those seeking a return of cash, some of whom are willing to agitate actively to get it.
...
The stock charts of hundreds of public biotechnology companies show them to be at various points along this progression, with the pain of each company reinforcing the risks for others because of how their fates interact within investor portfolios.
View attachment 131129
...
The markets are creating a forcing function whereby the limited supply of cash is making investors choose the companies that they believe stand the best chance of surviving this downturn … and also generating a return.


The Investor Relations firm my wife works at, this is all they are talking about.

Besides the traditional 100 year old pharmaceutical companies, which biotech firms have turned into something big or household brands?

 

[Subway]

Haha, Perdue pharma

sorry, that’s in poor taste

 

[casa_mugrienta]

Consumer Price Index Summary - 2024 M03 Results

www.bls.gov

CONSUMER PRICE INDEX - MAY 2022

The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.0 percent in May on a
seasonally adjusted basis after rising 0.3 percent in April, the U.S. Bureau of Labor Statistics
reported today. Over the last 12 months, the all items index increased 8.6 percent before
seasonal adjustment.

The increase was broad-based, with the indexes for shelter, gasoline, and food being the largest
contributors. After declining in April, the energy index rose 3.9 percent over the month with the
gasoline index rising 4.1 percent and the other major component indexes also increasing. The food
index rose 1.2 percent in May as the food at home index increased 1.4 percent.

The index for all items less food and energy rose 0.6 percent in May, the same increase as in
April. While almost all major components increased over the month, the largest contributors were
the indexes for shelter, airline fares, used cars and trucks, and new vehicles. The indexes for
medical care, household furnishings and operations, recreation, and apparel also increased in May.

The all items index increased 8.6 percent for the 12 months ending May, the largest 12-month
increase since the period ending December 1981. The all items less food and energy index rose
6.0 percent over the last 12 months. The energy index rose 34.6 percent over the last year, the
largest 12-month increase since the period ending September 2005. The food index increased 10.1
percent for the 12-months ending May, the first increase of 10 percent or more since the period
ending March 1981.

Good news for hodlers, who are "NEVER SELLING!"

I can see the Dateline special report:

"He lost his job. He lost his car. He lost his apartment. He's living in a homeless encampment. But he's still hodling."

 

[Northern_Shores]

Besides the traditional 100 year old pharmaceutical companies, which biotech firms have turned into something big or household brands?

Small biotech is next to impossible. There are reasons why it's called Big Pharma and not "3 guys and 2 Chinese exhange students at some lab doing guesswork" wich is what most small pharma companies really are. For every marketable drug there are 100 attemps and billions of dollars behind it. That's why they are big.

 

[PRCD]

Small biotech is next to impossible. There are reasons why it's called Big Pharma and not "3 guys and 2 Chinese exhange students at some lab doing guesswork" wich is what most small pharma companies really are. For every marketable drug there are 100 attemps and billions of dollars behind it. That's why they are big.

Besides traditional Big Pharma, what other biotech companies would I have heard of?

 

[Subway]

There are probably a bunch of small ones that make super specific little devices perhaps only used in a few thousand cases a year. Small, probably very expensive and profitable (and often after many failed early attempts etc) but still small and not well known due to the low volume and relative rarity of whatever said device/drug/teatment is used for

my cousin has a rare and excruciating form of shingles in his brain, the poor guy, and he’s even had custom electric devices implanted in his brain to try and ease his endless agony. Didn’t really work from what I understand. But that was probably some Uber high tech specialized little lab that built that device, I can’t even remember what it was called

 

[PRCD]

There are probably a bunch of small ones that make super specific little devices perhaps only used in a few thousand cases a year. Small, probably very expensive and profitable (and often after many failed early attempts etc) but still small and not well known due to the low volume and relative rarity of whatever said device/drug/teatment is used for

The guy across the street works for these guys:

https://en.m.wikipedia.org/wiki/Dexcom

Seems like the future of diabeetus mgmt is up and to the right.
Here’s another write up on biotech mega trends: https://www.agilent.com/about/features/en/life-science-megatrends.html

Like you said, the markets for a lot of this seem very small so the profits and selling price better be insane.

 

[Subway]

Are we cautiously optimistic about that experimental cancer treatment that trashed the cancer cells in nearly every case for everyone who participated in the first human trial…I think it was a trial in England maybe? Made pretty big new just recently across the mediaverse

it was an mRNA style treatment, ironically but not surprisingly. Anyway, a big part of why cancer is so invasive and deadly is because your white blood cells don’t recognize the cancer cells as a threat because they’re your own cells growing out of control. So from what little I know or remember reading, the mRNA teaches your white blood cells to recognize the cancer as a threat, and attack

 

[casa_mugrienta]

SO, who's excited for tomorrow???

 

[racer1]

Bloodbath. Lets go!

 

[casa_mugrienta]

Bloodbath. Lets go!

Bloodbath?

Those were my words...

Crazy casa

 

[racer1]

I'm buying SPY puts all AM.

 

[Mr Doof]

Will we get another .5% increase on Wednesday or more? I think it is probably a certainty the increase is at least .5% with 25% chance of .75%.

"The Fed is on track to raise interest rates seven times this year, with the third rate hike expected Wednesday at the conclusion of the central bank's meeting. It is expected to raise rates by half a percentage point, as it did in May, but the inexorable pace of inflation has some economists concerned that it will have to act even more aggressively."

 

[racer1]

I'm buying SPY puts all AM.

Various puts from $350 to $320, expiring in August. Come on Jerome! Let's do 1%!

 

[casa_mugrienta]

Will we get another .5% increase on Wednesday or more? I think it is probably a certainty the increase is at least .5% with 25% chance of .75%.

"The Fed is on track to raise interest rates seven times this year, with the third rate hike expected Wednesday at the conclusion of the central bank's meeting. It is expected to raise rates by half a percentage point, as it did in May, but the inexorable pace of inflation has some economists concerned that it will have to act even more aggressively."

Doesn't matter.

The Fed ain't serious.

It's a political position plain and simple.

They know the economy can't tolerate the interest rate hikes it needs to tame inflation...they're not going to take the blame for causing a needed depression.

They've been steps behind inflation the entire time - even when they could've been right alongside it they've chosen to act later rather than sooner.

There's a reason for that. I think the Fed will eventually pivot when the economy tanks and probably throw another stimmy check and inflation will run... Why?

Because it's way easier to let politicians play the blame game with inflation (blame it on greedy corpos, oil companies, etc) ...than it is for the Fed to directly cause a depression via interest rate hikes.

And that is how the Fed will play this.

Act hawkish > pivot > let Congress take the reigns and implement price controls.

The convoluted nature MIGHT allow the Fed to maintain some credibility. If not...get ready.

 

[casa_mugrienta]

As predicted, treasury yields continuing their upward trend hitting an 11 year high yesterday as per "the charts".

Would a treasury yield @ 5%+ make the national debt difficult to service?

Asking for a friend.

 

[GromsDad]

Lost an incredible amount of money from my 401K since the 1st of the year. 19% of what was in the account on 12/31 has vaporized. Leave it alone or try to stop the bleeding? Suggestions for allocation changes or types of funds to move things into?