And this why investing in this end of the market can be life changing. Grabbing a diamond in rough when the market is not interested can be a real wealth grower. Buying Junk when the market has it over priced can cost you your savings.
Its a hard one to get right, but if you do, it truely can be life changing.
Keep an eye on how the pipeline is progressing. Is it going as the company had roadmapped? Are the development or trials achieving goals? Is the product novel? Addressing an unmet need with fast track approval potential? Does it have much of a potential market? Has it many peers? If so, what makes it different.
Reread the lastest update on PTX100 and PTX200. Ask yourself why TF would waste time on some sub $US45 Million dollar company if they didnt see potential.
Market forces have kicked biotech companies in the groin. Very few have come this far unscathed. The option expiry has added to selling pressure. Selling at these prices is really eating into any advantage of arbitrage with a heads to option trade. Could that alone put a floor on the price? As the expiry date gets closer, more and more option holders will dump their holdings into the market, taking whatever money they can get. Others will buy those options and convert them at a discount to the head price. Someone will potentially win, the other will lose. But once the discount of the option conversion disappears pressure on the sell price disappears.
And then trading returns to normal. (ish).
Opportunity for some is ruin for others. The joys of the free market.
PTX Price at posting:
8.5¢ Sentiment: Buy Disclosure: Held
