Market do over-react in the short term but over a longer period...

Market do over-react in the short term but over a longer period the sp will reflects the company fundamentals.
Quote: Yes indeed. Knowing the value is one key. Can you provide any analysis on the current value? End of Quote.

Moreld,
Thank you for your invitation to express my opinion on the “value” of BTA shares.
In short a discount to the cash backing.

On 30 Nov BTA traded at $1.74. Peter Cook appointment as CEO was announced on 2 Dec 05 and BTA sp closed at 34cents on 31 October 08. Most rational investor would not consider 35 months as “short term”. Thus I repeat “Over a longer period, the market had indeed reflected the company fundamentals”.

What is the cash backing? From the limited public information There is a good possibility the cash backing is in the range of $45M to $50M (25.8 cents to 28.6 cents)
Please refer to my earlier post for details: http://www.hotcopper.com.au/post_single.asp?fid=1&tid=769559&msgno=3458443#3458443

Why a discount to cash backing?
Peter Cook stated that 08/09 will be cash neutral. All the Brokers recommendations published on BTA website predicted future Relenza’s future royalties in the range of $20M to $30M per annum. Not withstanding any expressed disclaimer, I presume Peter Cook “cash neutral” statement must be in line with the same royalties expectation of the brokers that he had the good sense to promote on BTA website, Historical data of the Relenza royalties trend and in particular the last 2Q show the incredible statistical ODDS of achieving $20 to $30M royalties. Lest we forget GSK is now strongly marketing call options over Relenza. With the proven BTA board’s pedigree for exceptional decisions making skills and predictions, I expressed strong doubts of a “cash neutral” 08/09. Less we forget a cash balance of $62M reducing to $60M had been promoted (albeit with irrelevant explanation) as a CASH POSITIVE year.

So if my estimate albeit from limited public information is correct, the $55M in the bank on 30 September is not an endless pot of gold, is it?

Ah, I can hear some say – What about those drugs in development. Yes, I expressed before and I will express it again – the drugs in development have great potentials and I am as excited as anyone here about Lani. How ever these drugs will only be ready for commercialisation 2 to 3 years away. And when the drugs are ready for commercialisation, there are still huge risks in the execution stage. BTA had proven beyond reasonable doubt the execution risks. It is no mean achievement for the superior drug Relenza going to market a year before Tamiflu and then ending up with 5 to 10% of market share. Please, a solid round of applause for these pedigree.

Again if you have any doubt, read my post on Peter Cook’s achievement in marketing Orbital Engine that can turn combustion engines mean and lean, the perfect solution for a oil hungry. A standing ovation for Peter Cook, please. Let use see what wonders such exceptional skill can do for Biota in these tumultuous economic times.

In summary, the market had indeed expressed the value of the company. And if I may borrow Peter Cook's expression: I havent the faintest idea what the share price will be in the short term but I can say with certainty, there will be fluctuations, sometimes above the cash backing, sometimes below the cash backing.

For any chance for success BTA must be able to get rid of the parasites.