Our Alzheimers breakthrough, page-25

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interestingtome

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27/04/16

01:05

Post #: 17604473
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Originally posted by m123456 ↑

http://seekingalpha.com/article/396...xic-financing-set-severe-decline-price?page=2

pretty scathing article on AVXL - not because of its science - but because of how it's gone about its funding..

If AVXL's intellectual property is so great, why does the company have to resort to vulture capital financing?
Judging by comments I have seen on other articles, supporters of AVXL are going to rebut the argument I have presented here by talking about the science. I've seen a few comments where longs claim to know better than the market. Perhaps some of them are in the medical field and may be well versed in Alzheimer's Disease. This is all well and good, except if AVXL's intellectual property is so great, why has it had to resort to LPC for funding? There are three reasons which I can think of:

The company's IP is not compelling enough to attract real institutional investors.

The company is naive and doesn't know what it is getting into.

The company knows exactly what it is getting with LPC and is seeking financing from the fund anyways.

I am short (through a long put option position) not because I dislike the potential of the science, but because the financier AVXL has chosen to deal with has consistently destroyed value for long term shareholders of many other companies. It's absurd to think that AVXL will be some magical 1 in a 100 exception to the Lincoln Park Capital trend. The 16% bump seen on Monday due to the performance of AVXL's miracle drug will probably be short-lived. I expect AVXL to be trading at $4 or less by the end of the year.
Disclosure: I am/we are short AVXL.

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If you need any more examples (it doesn't seem like you do) look at AMBS. Lincoln Park is involved there too.
PBT Price at posting: 8.0¢ Sentiment: Buy Disclosure: Held
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