@Growme84 In trying to answer your question (but not necessarily the right answer just imo) the effects of shorters really is how you view them and the circumstances behind their short position. Overall they can in the long term cause damage to a company that is well run but may have a temporary weakness. Say that weakness in the usual passing of time could be overcome with say perhaps an additional raising of funds (sound familiar?) then by depressing the share price below a level it might otherwise be, by also orchestrating a campaign of deceit or at best misinformation, they can make it almost impossible for that company to raise funds, driving it into bankruptcy. Biotech stocks are vulnerable as over the period of development, additional funds may have to be raised, as the company is cashflow negative until it reaches a certain point in its development. However good news, good results, good income growth, in other words sticking to the "script" will make it harder for shorters, as any price down is a better buying opportunity for those who are aware of all the good things. That leads me to Mesoblast. A few months ago (and this is also with the benefit of hindsight) we were in a harder situation. We were burning cash and had been burning at a faster rate that was good to for us given the news as we were expecting srGvHD approval and had been gearing up. We were also expecting the Ards trial to be maintaining its recruitment policy and great outcomes, that had until the last phase, led many of us to believe in a quick signing of the Novartis deal.
Therefore we would were getting to the position of having to to raise money. So for the shorters there was an opportunity of driving the share price down. Raising funds through shareholders always takes a little time (and fees) and they would have been able to make hay while this process was going on. Plenty of shares around (no doubt with a hefty discount) would have made it easier to buy back leaving them with the profit and us LTH's probably out of pocket. Instead SI plays a blinder with the Surgcenter deal (unfairly maligned by some I thought) and at a stroke our cashflow problem solved for the about 18 months.
Consider now as we sit in this waiting period, these "few weeks"! as SI said at the last conference call. Many of us are confident about Novartis and also the data generated that seems to support the exciting prospects we believe are there. The shorters are up to their old tactics. I admit they may have the benefit of insider trading, but that is almost impossible to factor in. We don't quite know what SI means when he says a few, just like the infamous "momentous" comment he previously made. However assuming it is this year, we do know from the Surgcenter deal, that we have enough cash to get us to that point and more. Therefore cannot go out of business. So to answer your question, this current short attack, offers if you believe in the science behind our therapies and you believe that Mesoblast will on its own or in partnership find a route to market, and that the news from either Ards, SRGvHD, CLBP, and in the longer term Heart and IBS etc, will be good. If you believe that Novartis or another big pharma will be JV'ing with us. Then IMO any reduction in share price enhances the opportunity of buying and holding for massive profit.
Personally i am very excited for the prospects for this share in the medium term. Very excited. I cannot afford to buy any more, as the cash I keep gives me the time to hold through periods like this. So if you are like that, then I share your view that the shorting makes no difference to us.
Hopefully the news will come thick and fast, the share price will rocket and then we can see the shorters trying to limit their losses. Wishful thinking at the moment, but give it time, give it time. As to exaggerating the rise by the selling up? May well do, especially if we all hold. To be honest I think it will simply go ballistic anyway. As @LearningEachDay comments above, we will rise. Regards Yelrom
MSB Price at posting:
$1.72 Sentiment: Buy Disclosure: Held
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