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08:22
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Originally posted by Eternal:
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A better analogy would be a marathon which also had a 5km prize for groups who had undertaken different training.5000 of those intending to do the 5km race had an electrolytic sports drink and 5000 had water. There was no statistical difference in performance of the two groups over 5km.BUT 5000 competing in the marathon section who drank the electrolytic drink through the race had significantly better times than the group of 5000 which drank only water (p=.01).There was no significant difference for the total of all people in both races - 10,000 who had the drink and the 10,000 who had only water, well the electrolytic group did better, but the p-stat was 0.051 so it wasn’t significant. Then you could debate whether the results meant the electrolytic drink was useful in longer events but didn’t make much difference in (pre-specified) shorter events.On another topic, volumes were a little higher in both Australia and US on Friday - though still low compared with the days a couple of years ago when MSB had an active story to tell. The rise in the price of a small cash-burning biotech when others were doing so badly is encouraging. MSB is the last man standing in the western stem cell space who have the capacity to fund a significant trial - the rest of the commercial sector has been neutered. The Japanese companies continue to do well, but they are the only ones, thanks to the intransigence of the FDA, and that is a help to MSB through royalties, but no one else has much hope short of a big brother coming in with significant capital.Analysts still see value in MSB and the average US analyst price target is still double the current share price. The price clawed up through the important $3 level in the US for MESO on Friday night. That is slightly below the Aussie close but is an important level to hold, both psychologically (for charting) but more importantly for US margin lending - I know Charles Schwab (and other brokers) remove stocks from the ability to margin lend once their price falls below USD3.00. US margin borrowers would have had to either top up their accounts with Schwab and other brokers with the same limit when the MESO price initially fell below $3 - and of course many of them would have been forced sellers when this happened. It would be risky to borrow on margin for MESO at present in case the price were to fall back below $3 - so they’ll probably wait until there is sufficient buffer before margin lending re-emerges as a source of demand for stock - but a decent announcement would give that buffer and create a wave of margin buying.The low volumes in the ASX market at present tell us that those who took up the recent placement at 75c have no interest in profit taking at these levels, and I believe that those likely to flip their stock have already done so. Over 22m (and maybe as much as 30m) of the 86.66m shares were used to cover shorts (so are not available for flipping) and it is highly unlikely that holders such as M&G would flip their stock for a small gain (that hasn’t been their past practice). Maybe up to 30m would be flipped, and that could’ve easily happened by now - anyway there is no excessive volume at current prices and investors taking the placement have already had some opportunities to flip at over $1, which would’ve generated a nice 33% gain, more than enough for some of the short term funds who prey on companies forced to do discounted placements.MSB is still yet to reach the level it was trading at pre the tax-loss selling hit it took in June this year, and that bout of selling dropped the share price below the USD3.00 limit for margin loans which would’ve created some US selling as well. US holders have also been hit this year by the fall in the AUDUSD rate. The price was also dented by the 75c placement back on 9 August - so there have been a lot of negative technical tax, lending and stock supply issues to soak up. The low volumes in the past two weeks tell us that all of those negative factors are no longer generating selling, so the stock should react very positively to impending news on the BLA resubmission. I think that will happen before the conference call at the end of this month and definitely before the end of December - otherwise MSB should have issued an announcement that the BLA will have been delayed by more than 3 months past their “expected” date. MSB are overly careful to avoid any potential breach of continuous disclosure rules since the class actions, and I’m sure their insurers and/or lawyers pour over every announcement made to avoid any chance of more class actions. The next conference call at the end of this month could therefore provide a major boost to the share price, kicking it through $1 and finally putting the negative factors of the past 6 months behind us.
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Thanks Eternal for your analysis. What is the conference call at the end of the month for? Also would you have an opinion on how much of the Aussie price is being propped up by the exchange rate considering the fundamentals are all USD and not AUD based? Could this magnify a sharper rise in the MSB price compared to MESO if ryoncil is approved?
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