gtg future looking bright
Although Friday’s announcement is the best news for quite some time, it may not change market sentiment toward gtg immediately because it is not the news everyone is waiting for. Well, I hope so! I'm keen to buy more at these prices!
If you want my honest opinion, gtg currently represents the best buy in the asx. If you buy or hold gtg now you will very likely triple your money in 6mths. The only thing worse than loosing considerable money on a stock is watching others benefit from your lack of patience. Furthermore, what’s better than earning money from a stock is learning how to examine a potentially good company under the microscope and know when to buy or steer clear. You and I know, with developing companies, last year’s accounts are about as relevant as what the pope had for breakfast yesterday! The real key with developing companies is recognising the hype phase, the waiting for profit phase and the growth phase. Us GTG’ers certainly have learnt our lessons here. (BTY, what phase do you think PSD, VCR, EPT and others are at right now?) IMO, it appears for gtg at least, the waiting for profits phase has now ended and the growth phase is about to begin. Furthermore, there is reason to believe the directors have a plan to rocket gtg into all time highs quickly. This opinion is not just based on the current announcement, but by considering the director’s interests and what is in the pipeline for gtg in the immediate future.
What would have to be of great concern to the gtg directors and in particular, the chairman Dr Mervyn Jacobson, is the approaching expiry date (28/4/05) of the 20c options. Merv owns 55 million of these and the other founding members of the company own around 10 million of these between them. That’s 65 million reasons to believe the gtg directors have a plan to get gtg to all time highs within 6-7mths. This plan has to be exercised after the alrc report is tabled. Otherwise the aus gov might get the impression gtg is a fat cash cow ripe for the picking. IMO, expect the alrc report to be no problem for gtg and behind us in about 2-3 weeks.
Now back to the current announcement! The real significance of this announcement is the fact that it is not an “event” announcement. gtg could release this announcement at anytime! Usually, profits get announced at the agm, November! So why release this right now? Increasing support for the sp may be one reason. However, in the context of gtg’s plan, now would be an ideal time to be reporting the benefits from the gene testing businesses for two reasons. (1) It puts gtg in a good light for the aus gov when they consider gene patenting laws in a week or two. (2) This announcement could be insignificant and wasted if it were to be released after gtg’s plan is exercised. You can speculate on this plan yourself. But I suspect the adr-1s, applera, multiple licenses, fabulous agm, dividends, media, etc to all be a part of the plan. This plan may get exercised sooner rather than later, even before the adr-1 listing. Particularly if the base option stocks are the ones to be traded on nazdaq.
Sure, you can wait for the uptrend to commence. However, it is known that there are 2000+ companies requiring gene licenses and the applera settlement is firstly needed to maximise the benefit from these. So I think Merv will try to get the sp into orbit by firstly lighting the solid rocket boosters, with a significant announcement like the applera settlement, and then use regular announcements of gene licenses as rocket fuel to keep the momentum going.
Kacy
GTG Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
