New World Investor – 2.1.24

Michael Murphy
Uncategorized
2024-02-02
02
Feb 24

Dear New World Investor:

New email delivery rules from Google and others go into effect today. If you didn’t get the usual email saying this issue is posted, that’s why. I’ve wasted spent hours working to comply with their constantly changing rules, despite never in the history of NWI sending a single spam message. I thank you for your understanding and I will get this fixed.

Yesterday, the Fed continued their pause and said: “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.”

They said the risks to achieving price stability and maintaining full employment are “moving into better balance” and completely stripped out language from prior statements that left room for rate hikes. As I’ve been saying, High – but not Higher – for Longer.

In the press conference, Chairman Powell said: “I don’t think it is likely that the Committee will reach a level of confidence by the time of the March meeting to identify March at as the time to do that (cut rates), but that is to be seen.” Yet the CME’s FedWatch Tool says markets are still pricing in a 36% chance of a March rate cut, down from a 73% chance seen a month ago, and a nearly 90% chance of a rate cut in May. Sigh.

The S&P 500 dropped 79 points yesterday as all 11 S&P 500 sectors closed with a loss. CNBC said it caught Wall Street by surprise, but as we know the drop is just a psyop to shake some stock loose out of weak hands. The next piece of news to “catch Wall Street by surprise” will be the recognition that there’s going to be a recession. The JOLTS Job Openings Report increased to 9.026 million, above the forecast for 8.75 million and last month’s 8.925 million. But at the same time, actual hiring slid and quits plunged to pre-Covid levels as nobody dares to leave their job.

Click for larger graphic h/t @zerohedge

Click for larger graphic h/t @DiMartinoBooth

Even better, the Employment Cost Index came in at 0.9% for the December quarter, below the estimate of 1.0% and the September quarter’s 1.1%. This is the most complete measure of compensation for workers, and is reflecting the decline in inflation.

Click for larger graphic h/t @LizYoungStrat

Last Friday morning the Fed’s favorite inflation indicator, the “core” Personal Consumption Expenditures index that excludes volatile food and energy prices. clocked in at 2.9% for the month of December, down from 3.2% in November and beating estimates for 3.0%. It was the first time the core PCE fell below 3% since March 2021. Even better, the core PCE inflation rate fell to 1.5% on a three-month annualized basis, its lowest since late 2020. On a six-month basis it was 1.9% for the second month in a row. Both of those marks are below the Fed’s 2% target.

Click for larger graphic

Market Outlook

The S&P 500 added 0.2% since last Thursday, including a record close on Monday and a record intraday high on Tuesday, before the Fed lowered the boom. The Index is up 2.9% year-to-date. The Nasdaq Composite lost 1.0% after Wednesday’s tech sell-off. It is up 2.3% for the year. The SPDR S&P Biotech Exchange-Traded Fund (XBI) climbed 0.5% but is down 0.4% year-to-date. The small-cap Russell 2000 was almost unchanged and remains down 2.6% in 2024.

The fractal dimension hit the 30 mark, indicating the uptrend is about over. We should expect a consolidation ahead, either through nothing much happening until April (good time to write call options for premium income) or a sharp, scary three- to five-week decline.

Since 1953, when the S&P 500 ended January up at least 2%, it finished the rest of the year with a median gain of 13.5% and finished green 84% of the time.

Click for larger graphic h/t @TheMarketEar

It’s true that the share of Top 10 stocks is nearing the 2000 peak, so strategists are warning of a pullback led by top US equities. That is inevitable – but probably in 2025.

Click for larger graphic h/t @Mayhem4Markets

Treasury Secretary Janet Yellen is causing stock market rallies with her quarterly refunding announcements. As Ayesha Tariq CFA pointed out, with the Fed stepping aside as the biggest buyer, regular buyers demand a premium. Yellen responds by issuing more short-term paper because the term premium makes it less appealing to term out the debt.

Consequently, long-term debt issuance is relatively lower than expected and yields decline. It’s quite likely the Treasury will continue with shorter-term issuances, thinking rate cuts are on the horizon and tax receipts are running slightly higher on the back of a stronger-than-expected economy. This means lower long-term yields, which means risk assets fly.

Top 5

Changes this week: None

Near-Term – chronological order
SCYX – ScyNexis – Data releases and resolution of the manufacturing problem
TGTX TG Therapeutics – Rapid recovery from overdone pullback
EQT EQT –natural gas price rebound
USL United States 12 Month Oil Fund, LP – crude should rise quickly
FCX Freeport McMoRan – copper shortage

Long-Term – alphabetical order
EQT EQT – largest US natural gas company
GBTC Grayscale Bitcoin Trust – Bitcoin is headed for $100,000
NVTA Invitae – the winner-take-most of genetic testing
META Meta – a (the?) leader in the metaverse
RKLB Rocket Lab – #2 to SpaceX in space
SCYX ScyNexis –First new antifungal in 20 years
VLD Velo3D – Return manufacturing to the US

Economy

The Atlanta Fed’s GDPNow model initial estimate for the March quarter was +3.0% on January 26, far above the Blue Chip consensus for +1.0%. This morning they revised that up to a whopping +4.2%. I think that will come own dramatically over the next couple of months, but it certainly looks like the recession I’m predicting won’t start in the first quarter.

Click for larger graphic

Coming Events
All times below are ET, and most presentations and slides are archived on the companies’ websites so you can listen to them.

Friday, February 2
AAPL – Apple – Vision Pro ships

Tuesday, February 6
GILD – Gilead – 5:00pm – Earnings conference call

Wednesday, February 7
QUIK – QuickLogic – Unspec – A.G.P. Virtual Technology Conference
SCYX – ScyNexis – 11:00am – Guggenheim Biotechnology Conference fireside chat

Thursday, February 8
SFTBY – SoftBank – 2:30am – Earnings conference call
QUIK – QuickLogic – 5:00pm – Chiplet Summit panel: “Chiplets for Entrepreneurs – Making Money in the Chiplet Game”

Friday, February 9
Short Interest – After the close

Big Tech: The Biotech & Digital Dominators MegaShift
There are at least four ways to make money in the stocks of these large, growing, dominant companies. You can:
* * Buy a stock and hold it
* * Buy a stock and write a call option against it
* * With a Level IV options account, write an out-of-the-money put option
* * With a Level IV options account, write an out-of-the-money put option and use part of the premium to buy an out-of-the-money call option

Apple (AAPL – $186.86) reported December quarter results above expectations, although analysts focused on Chinese sales below expectations. Revenues grew 2% from last year to $119.58 billion despite one less week in the quarter, above the $117.97 billion estimate. Earnings per share hit $2.18, also topping expectations for $2.11. China sales of $20.82 billion were below the $23.5 billion estimate.

Market research firm IDC said that although iPhone shipments in the quarter declined 2.1% year-over-year, for the full year Apple overtook Vivo to take first place as the top smartphone seller with a 17.3% market share. This was the first time Apple became the top seller in China.

On the conference call (TRANSCRIPT HERE), CEO Tim Cook said the installed base (to buy services) is more than 2.2 billion active devices. The iPhone active installed base grew to a new all-time high, and they had an all-time record number of iPhone upgraders during the quarter.

Services grew 11.3% year-over-year to another new record :

Click for larger graphic h/t Seeking Alpha

Widely-read TF International Securities analyst Ming-Chi Kuo, best known for gathering intelligence from his contacts in Apple’s Asian supply chain, reported that Apple has lowered its 2024 iPhone shipments of key upstream semiconductor components to about 200 million units, which correspondents to a decline of 15% year-on-year. As a result, he expects iPhone 15 shipments to decline by 10% year-over-year in the first half 2024 compared to iPhone 14 shipments in 2023. He expects the coming iPhone 16 series shipments to drop 15% year-over-year in the second half, compared to iPhone 15 series shipments in 2023. He pointed to the new high-end mobile phone design paradigm that includes Generative AI and foldable phones. He doesn’t expect Apple to launch new iPhone models with those design changes until 2025 at the earliest.

Today, Apple announced 600 new spatial computing apps built for the Vision Pro headset. I expect Apple services growth – they just started another season of Major League soccer – and the Vision Pro to provide plenty of growth. But due to the double beat, the stock only fell 3% after hours, so I’m still in wait and watch mode. AAPL is a Buy under $150 for new iPhone rollouts and augmented/virtual reality products.

Corning (GLW – $32.09) reported December quarter revenues down 9.9% from last year to $3.27 billion, right on the $3.25 billion estimate. Pro forma earnings per share of 39¢ were just under the 41¢ estimate,

On the conference call (INFOGRAPHIC HERE and TRANSCRIPT HERE), management said: “While our current sales are below trend, we expect that to change in the midterm as our markets begin to normalize. This creates an opportunity for us to increase our sales by more than $3 billion when that happens.

“As we capture that growth, we expect to deliver powerful incrementals because we already have the required production capacity and technical capabilities in place and the cost is already reflected in our financials. The incremental profit and cash flow annuity created by increasing sales by $3 billion plus is a terrific opportunity for our shareholders, and we expect to start making progress towards realizing that opportunity in 2024.

“Now it’s difficult to call the specific timing of a recovery, but we continue to see signs that it will occur in 2024. As a result, we expect the first quarter to be our low quarter of the year.”

On Optical Communications, they expect sales to accelerate because their carrier customers bought excess inventory during the pandemic that they’ve been using to continue deploying their networks. These carriers will soon deplete their inventory but continue to execute their increased broadband deployment plans. They have to return to their normal purchasing patterns to service their deployments.

They guided for March quarter revenues of $3.1 billion with earning of 32¢ to 38¢ per share. GLW is a Buy under $33 for the 5G cellular buildout, followed by the smartphone upgrade to use 5G services. My target is $60 in 2025 .

Gilead Sciences (GILD – $78.16) invested another $320 million in Arcus Biosciences (RCUS), giving them 33% ownership. The two companies have reprioritized the joint domvanalimab development program to focus on advancing and potentially accelerating the Phase 3 studies STAR-121 (lung cancer) and STAR-221 (gastrointestinal cancer), which are both expected to be fully enrolled by year-end. Gilead is becoming an oncology powerhouse. GILD is a Long-Term Buy under $80 for a first target of $120.

Meta Platforms (META – $394.78) is back in the trillion dollar market cap club. After today’s close they reported December quarter revenues up 24.7% from last year to $40.11 billion, nearly $1 billion above the $39.17 billion estimate, with GAAP earnings of $5.33 per share, comfortably above the $4.94 consensus estimate. They initiated a 50¢ quarterly dividend and the stock jumped $59 or 15% after hours.

On the conference call (AUDIO HERE and SLIDES HERE and TRANSCRIPT HERE), they said daily active people hit a new high at 3.19 billion, up from 3.14 billion in the September period and 2.96 billion last year. Monthly active people also were a new all-time record at 3.98 billion, up from 3.74 billion last year.

Average revenue per person soared from $8.63 last year and $8.71 in the September quarter to a record $10.10. Meta has figured out how to get around Apple’s non-tracking for advertisers. Ad impressions grew 21% year-over-year while the average price per ad increased 2%.

Facebook’s average revenue per user still is much higher in North America than the rest of the world. That gap might never close, but there’s a lot of revenue opportunity left in Europe and Asia.

Click for larger graphic

They guided the March quarter to $34.5 to $37 billion in revenue, significantly above the consensus for $33.83 billion.

Headcount fell 22% from last year to 67,317 at the end of 2023. They repurchased $6.32 billion of common stock in the quarter and $20.03 billion in the full year. They still have $30.93 billion available and authorized for repurchases, and announced a $50 billion increase in the buyback program today.

They booked $11.5 billion in free cash flow in the quarter and ended the year with $65.4 billion in cash. META has soared over my 2024 target of $400. Let’s wait to see where it settles before changing the $345 buy limit.

SoftBank (SFTBY – $21.86) invested $20 million in Alibaba when it was still a start-up in 2000. They just divested their shares and booked a gain of $8.5 billion – about 425x the value of its initial outlay. Masa rules! SFTBY is a Buy under $25 for a first target of $50 in the next two years.

Small Tech

Enovix (ENVX – $9.42) CEO Raj Talluri told the Seoul Economic Daily: “We are in early-stage supply discussions with Samsung Electronics and are currently in the sample testing phase.”

ENVX is a Buy up to $20 for a 4-year hold to $100+ as their BrakeFlow lithium-ion battery takes market share.
Primary Risk: A new competitor invents a better battery.

Rocket Lab USA (RKLB – $4.02) announced December quarter preliminary unaudited financial results. The conference call is February 27. Revenues were $59.0 million to $61.0 million with a pro forma loss of six cents a share.

They successfully launched their first Electron mission for 2024. It included the successful return of the rocket’s first stage after launch as part of Rocket Lab’s plan to evolve Electron into a reusable rocket. After launch and stage separation, Electron’s booster made its way back to Earth under a parachute and splashed down in the Pacific Ocean 17 minutes after lift-off.

Rocket Lab will retrieve the stage and bring it back to their production complex for a post-launch review and analysis before proceeding to one of the program’s final tasks: reusing a previously-launched first stage on a future mission.

Wednesday, they announced a private offering of $275.0 million of convertible senior notes due 2029. RKLB is a Buy up to $13 for my $30+ target as low earth orbit satellites and space exploration grow.
Primary Risk: A new competitor emerges.

Velo3D (VLD – $0.25) said they’ve booked $12 million in new orders since mid-December, with more than 50% of bookings tied to key strategic accounts. That demonstrates increased customer satisfaction and confidence in its technology. The new CEO published four key strategic priorities for growth in 2024 and beyond – a five-year plan.

The first is to enhance the quality of newly manufactured Sapphire printers. They have significantly reduced the installation time of Sapphire printers over the last year and increased the Customer Service and Quality teams by approximately 40% to provide on-site support in all major metropolitan areas.

The second is to ensure the success of customers in the field. Through reliability improvements, system uptime for key customers has increased over the previous quarter. Over the past six months the company has reduced the time it takes to resolve customer issues by more than 45%. They’ve refocused R&D on customer success and machine throughput to greatly increase customer available print time.

The third is to increase revenue visibility through bookings growth. The fourth in to improve margins and cash flow. They remains on track to reduce operational expenses by 40% by the end of the March quarter, with a commitment to become cash flow positive in the second half of 2024.

CEO Brad Kreger said: “The value of our technology is largely driven by its ability to accelerate innovation for customers, meaningfully improve lead time for mission-critical parts, and streamline the process of scaling to volume production when compared to conventional metal 3D printers.”

Subscriber JGMD asked: “The IR guy said that revenues would have to be $25-$30 million a quarter to breakeven. With 40% reduced expenses of $16 million, that assumes 40-50% margin. From their balance sheet, and your knowledge of manufacturing in this field, is that plausible?”

On the third quarter conference call, management guided for December quarter revenues in a very wide range from $15 million to $27 million, with a gross profit margin – the selling price of a Sapphire 3D printer minus the cost of production – of 5% to 17%. With the reasonable assumption that the gross margin is 5% at $15 million in revenues and 17% at $27 million in revenues, we can calculate their incremental gross margin. At $15 million they make $750,000 gross margin, while at $27 million they are projecting $4.59 million. On the additional $27 – $15 = $12 million in revenues, they make an additional $3.84 million. That’s a 32% incremental gross margin ($3.84 million divided by $12 million).

If we then make the very conservative assumption that the 32% doesn’t get better with even higher quarterly revenues, in order to cover the projected reduced General & Administrative expenses of $16 million they would need $63 million in quarterly revenues. So the IR guy is wrong. The right number probably is around $50 million.

The company is projecting free cash flow breakeven in the second half of this year, which is a stretch goal I think they can hit, Cathie Wood just reported owning 13,354,810 shares or 5.59% of the company. Angellist Advisors, a venture capital fund in Seattle, reported owning 22,724,407 shares or 8.8%. VLD is a Buy up to $6 for my $50 target as Velo3D’s high-tolerance metal parts printing business grows.
Primary Risk:A new 3D metal printing competitor emerges.

Biotech MegaShift: The $20-For-$1 Stocks

Say you put $2,000 into a stock that goes from 50¢ a share to $10. The $2,000 turns into $40,000. Then you put the $40,000 into another stock that goes from 50¢ to $10. That turns the $40,000 into $800,000. You did it with two stocks and never risked going negative more than $2,000. (Not that you won’t be mad at me if the first one works and then the second one doesn’t, taking your $40,000 to Money Heaven.)

If you can afford it – and it would not be too big a position in your portfolio – putting $2,000 into each of these speculative biotechs might be a good way to start. Buying these out-of-favor, fallen, or forgotten companies that can get important products through the FDA at very low market capitalizations seems like a good strategy to me.

Risks

Development-stage biotechs are subject to investor sentiment swings from wildly optimistic to excessively pessimistic – mostly the latter recently. After the Primary Risk for each company, I’ve added the clinical stage of their lead product, the probable time of their first FDA approval, and the probable time of their next financing.

As always, you need to think about an appropriate position size. You could buy a full position upfront and then just hold on, or buy some upfront and leave room to add more on the inevitable financings, transient clinical trial setbacks, and the like.

Akebia Therapeutics (AKBA- $1.71) got a standard high-cost term loan. According to the 8-K the interest rate is the one-month Secured Overnight Financing Rate subject to a floor of 4.25% per annum plus a margin of 6.75% per annum, subject to an overall cap of 15.00% per annum on the all-in interest rate. They have to get vadadustat approval by June 30. It looks OK to me. Buy AKBA up to $2 for the vadadustat launches in the EU, UK, and (after FDA approval in March 2024) the US.
Primary Risk: Vadadustat not approved in the US.
   Clinical stage of lead product: Vadadustat PDUFA date 3/27/24
   Probable time of next FDA approval: March 27, 2024; TDAPA October
   Probable time of next financing: Late 2024 or never

Aptose Biosciences (APTO – $1.98) sold 5,649,122 shares and warrants exercisable at $1.71 at a combined offering price of $1.71 per unit. They also closed the $4 million private placement with Hanmi Pharmaceutical, which now owns 19.03% of the company, at $1.90 per share. This should net them about $12.8 million.

After the deals, they have 15,706,810 outstanding shares plus 8,332,163 warrants that will bring in future funds. APTO is a Buy under $2.50 for a $300 target in a buyout.
Primary Risk: Either drug fails in clinical trials.
   Clinical stage of lead product: Phase 2
   Probable time of first FDA approval: 2025
   Probable time of next financing: Late 2025

Invitae (NVTA – $0.38) partnered with BridgeBio Pharma (BBIO) to advance genetics-based drug discovery for rare diseases. Sun-Gou Ji, Ph.D., VP: Computational Genetics at BridgeBio, said: “We chose to partner with Invitae because of the unique scale and depth of their dataset on affected populations. Patients with severe and highly penetrant dominant disorders are not represented in general population studies, making it nearly impossible to find data anywhere except a disease-focused cohort like Invitae’s. These rich data sources will continue to offer researchers a mechanism to get a much deeper understanding of genetic variations and their effect on diseases.” [emphasis added – MM]

Buy NVTA under $10 for a first target of $50 and eventually $100+ when they become the Amazon of genetic testing.
Primary Risk: A competitor starts taking significant market share.
   Clinical stage of lead product: NM
   Probable time of first FDA approval: NM
   Probable time of next financing: Mid-2024.

Inflation MegaShift

Gold ($2,073.50) is currently on the verge of making new highs in six different fiat currencies. Central banks acquired more gold in 2023 than any other year in the last five decades. Next, the 60/40 portfolios may follow suit, as they typically do.


Click for larger graphic h/t @TaviCosta

The fractal dimension is waffling in consolidation territory. A move up over the next week or two would flip it back into an uptrend, but it would take a sharp move down to signal a new downtrend. Watching and waiting.

Miners & Related

Coeur Mining (CDE – $2.86) said the expanded Rochester silver and gold mine December quarter production reached record levels of approximately 1.3 million ounces of silver and 19,847 ounces of gold. That was quarter-over-quarter increases of 120% and 345% and year-over-year increases of 38% and 71%, respectively. These higher production levels were driven by the initial surge of ounces produced from the new Stage 6 leach pad and new Merrill-Crowe process plant, which began delivering silver and gold ounces late in the third quarter of 2023. Ramp-up activities at Rochester will be completed during the first half of 2024, after which throughput levels are expected to average 32 million tons per year, approximately 2.5x higher than historical levels, making Rochester one of the world’s largest open pit heap leach operations.

CEO Mitchell J. Krebs said: “Rochester’s fourth quarter production represents the first glimpse of its full potential as an engine of significantly higher cash flow generation and as a linchpin of Coeur’s near-term growth profile. Just as importantly, Rochester now assumes a key position as America’s largest source of domestically produced and refined silver just as global demand is set to increase with the rapid proliferation of electrification technologies that require silver.”

CDE is a Buy under $5 for a $20 target as gold goes higher.
Primary Risk: Prices of precious metals fall due to US dollar strength.

Sandstorm Gold (SAND – $4.68) posted their fourth Shareholder FAQ video:

SAND is a Buy under $10 for a $25 target.
Primary Risk: Prices of precious metals fall due to US dollar strength.

Cryptocurrencies

Cryptocurrencies are a diversifying asset that offer a unique opportunity to make (or lose!) a lot of money quickly. You can easily buy bitcoin and other cryptocurrencies at Coinbase, Block, or Robinhood.

Bitcoin (BTC-USD on Yahoo – $43,103.70) is recovering from the post-ETF drop. JPMorgan said selling pressure from investors taking profits in the Grayscale Bitcoin Trust is largely over.


Click for larger graphic

Next: the coming halving, which will happen when the number of blocks reaches 840,000 in April. Then the miners’ reward per block will decrease from 6.25 to 3.125 bitcoin. Usually, bitcoin’s price rises for about six months before a halving and is fairly stable during the event. The big growth occurs in the year following the halving. If bitcoin mirrors its performance from the last two halvings, its price could reach $220,000 in 2025.

Click for larger graphic

BTC-USD, ETH-USD, GBTC, and ETHE are Strong Buys.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.

Grayscale Bitcoin Trust ETF (GBTC- $38.41) was trading at a discount to its underlying assets that reached almost 50% in December 2022. It was heavily bought by about 20 hedge funds between 2022 and 2023, betting its price would skyrocket as the discount closed once the SEC approved the spot bitcoin ETF conversion.

Hedge fund Fir Tree Partners, with $3 billion in assets under management, first saw an opportunity in the last quarter of 2022, when Grayscale’s trust was trading at a 42% discount to its assets, a person familiar with the matter said. Its bet on the price dislocation narrowing totaled $60 million. I hope you also took advantage of the free money. GBTC is a Buy under net asset value but I’m still looking at alternatives with lower management fees.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.

Commodities

Oil – $73.95

Wednesday, oil booked its first monthly gain in four months. Oil traders were stunned when, in a huge reversal to its prior plans, the Saudi state ordered Aramco to stop work on expanding its maximum sustainable capacity to 13 million barrels a day (bpd), instead keeping it at 12 million bpd. That ensures that peak capacity will remain lower than projected rising demand for years to come, effectively pressuring oil prices much higher over the long run.

Back in 2021, Saudi Arabia’s state oil company said it was working to boost its production capacity to 13 million bpd, a capacity expansion it predicted would come fully online by 2027. As recently as November, the world’s biggest oil exporter said it was progressing “very well” with the multibillion-dollar project to boost capacity as demand in China and India continues to grow. They noted that upstream investment has a long lead time.

Ironically, Aramco’s CEO has often warned the market that the industry is underinvesting in new oil supply that will continue to be needed for decades. Now the biggest underinvestor is none other than Aramco. Curbing its growth plans leaves Saudi Arabia with a thinner production buffer in the future in the event of supply shocks, especially in a volatile Middle East. Overall, it guarantees not only a much more volatile price but a much higher one as well, especially once the current production thrust (driven by relentless M&A) by US shale finally peaks.

Every single gap up on the United States Oil Fund, LP (USO) open was sold down. Someone has clearly seized control of the oil paper market.

Click for larger graphic h/t @MPelletierCIO

Today, Al Jazeera tweeted that Israel agreed to pause fighting for peace talks. Oil plunged $3. At 1:36pm EST they deleted the tweet after the Houthis denied the rumor. Oil rallied. As @HFI_Research wrote:

Click for larger graphic h/t @HFI_Research

Despite having absorbed about 288 million barrels from the US Strategic Political Reserve (SPR), global oil inventories now sit at their lowest levels since at least 2017. Bullish.

Click for larger graphic h/t @ericnuttall

US oil production is reported at record highs because the Energy Information Administration reclassified distillates as oil – they aren’t. It’s important to know The Ugly Truth About US Oil Production And Why You Should Pay Attention. The end of US shale is near..

The July 2026 Crude Oil Futures (CLN26.NYM – $65.95) are a Buy under $70 for a $200+ target. Only buy futures for all cash; do not use margin.

The United States 12 Month Oil Fund, LP (USL – $35.99) is a Buy under $40 for a $100+ target.

EQT (EQT – $35.06) and most of the natural gas industry wrote an angry letter to Energy Secretary Granholm about the Biden Administration’s moratorium on authorizations for liquefied natural gas (LNG) projects announced on January 26. After promising European nations we would have their backs if they cut off Russian gas and blowing up the Nord Stream pipelines, this was a pretty big rug pull. EQT is a buy under $35 for a first target of $70 and a long-term hold for much higher prices.
Primary Risk:Natural gas prices fall.

* * * * *

RIP Melanie (Thank you for one of the sexiest songs ever)

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Click for larger graphic

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Your reading Kuppy on The Blowoff Editor,

Michael Murphy CFA
Founding Editor
New World Investor

All Recommendations

Priced 2/1/24. Check out the complete Portfolio page HERE.

Buys
These are the stocks everyone needs to own because transformative events are happening over the next year or two, and I expect to hold them long-term.

Tech Dominators
  Apple Computer (AAPL – $186.86) – Buy under $150 for new iPhones
  Corning (GLW – $32.09) – Buy under $33, target price $60
  Gilead Sciences (GILD – $78.16) – Buy under $80, target price $120
  Meta (META – $394.78) – Buy under $345, target price $400
  SoftBank (SFTBY – $21.86) – Buy under $25, target price $50

Small Tech
  Enovix (ENVX – $9.42) – Buy under $20; 4-year hold to $100+
  First Trust NASDAQ Cybersecurity ETF (CIBR – $56.55) – Buy under $40; 3- to 5-year hold
  Fastly (FSLY – $20.74 – Buy under $20; 2- to 5-year hold to $80+
  PagerDuty (PD – $24.153) – Buy under $30; 2- to 5-year hold
  QuickLogic (QUIK – $11.22) – Buy under $10, target price $40
  Rocket Lab (RKLB – $4.02) – Buy under $13, target price $30+
  Velo3D (VLD – $0.25) – Buy under $6, target price $50

$20-for-$1 Biotech
  Akebia Biotherapeutics (AKBA – $1.71) – Buy under $2, target $20
  Aptose Biosciences (APTO – $1.98) – Buy under $10, ultimate target $300
  Compass Pathways (CMPS – $11.34) – Buy under $20, hold a long time for a 10x return
  Inovio (INO – $5.31) – Buy under $14, hold a long time
  Invitae (NVTA – $0.38) – Buy under $10, first target $50, then $100+
  Medicenna (MDNAF – $0.32) – Buy under $3, first target $20, then maybe $40
  ScyNexis (SCYX – $2.11) – Buy under $3, target price $20, then $50
  TG Therapeutics (TGTX – $16.88) – Buy under $12 for buyout at $30+

Inflation
  A Short-Sale or REO House – ($415,400) – Hold
  Bag of Junk Silver – ($23.25) – hold through silver bull market
  Sprott Gold Miners ETF (SGDM – $23.45) – Buy under $28, target price $50
  Sprott Junior Gold Miners ETF (SGDJ – $27.73) – Buy under $39, target price $100
  Sprott Physical Gold and Silver Trust (CEF – $18.83) – Buy under $18, target price $30
  Global X Silver Miners ETF (SIL – $26.22) – Buy under $30, target price $50
  Coeur Mining (CDE – $2.86) – Buy under $5, target price $20
  First Majestic Mining (AG – $4.91) – Buy under $11, next target price $23
  Paramount Gold Nevada (PZG – $0.36) – Buy under $1, first target price $10
  Sandstorm Gold (SAND – $4.68) – Buy under $10, target price $25
  Sprott Inc. (SII – $37.12) – Buy under $40, target price $70

Cryptocurrencies
  Bitcoin (BTC-USD – $43,103.70) – Buy
  Grayscale Bitcoin Trust (GBTC – $35.41) – Buy
  Ethereum (ETH-USD – $2,313.38) – Buy
  Grayscale Ethereum Trust (ETHE – $19.44) – Buy

Commodities
  Crude Oil Futures – July 2026 (CLN26.NYM – $65.95 – Buy under $70; $200+ target
  United States 12 Month Oil Fund, LP (USL – $35.99) – Buy under $40; $100+ target
  EQT (EQT – $35.06) – Buy under $35; $70 first target
  Energy Fuels (UUUU – $7.97) – Buy under $8; $30 target
  Freeport McMoRan (FCX – $40.18) – Buy under $44; $65 target within two years

International & Other Recommendations
  EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ – $29.19) – Buy under $38 for a $66 target in 12 to 18 months
  KraneShares Bosera MSCI China A Share Fund (KBA – $19.21) – Buy under $40 for a three- to five-year hold
  Morgan Stanley China A-Shares Fund (CAF – $12.41) – Buy under $18 for a three- to five-year hold
  KraneShares CSI China Internet ETF (KWEB – $23.66) – Buy under $40 for a double over the next three years
  Acreage Holdings (ACRDF – $0.21) – Buy under $2 for the Canopy Growth merger
  Mongolia Growth Group (MNGGF – $1.19) – Buy under $1.30; long-term hold

Holds
These are holds but not sells – yet. They could get moved back to one of the buy categories if their prices drop or outlook improves, or they could become sell recommendations in the future.

  Arch Therapeutics (ARTH – $3.00) – Hold for buyout

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MM- you’re correct – no email received to notify that the report is posted; not even in my spam folder.

Ditto that.

Me too! I clicked on an old issue!

4th guy, same issues..

AAPL
So a while a k you said buy on morning of Vision Pro rollout. Now it’s wait and watch so which is it?

AAPL
We’ll I suppose I should somewhat thank you Michael M Bought on the opening at $179,96 and it has all but wiped out todays deficit

VLD – Following is an interesting article containing the highlights of a recent interview with VLD’s new CEO (Brad Kreger):

https://3dprintingindustry.com/news/interview-velo3ds-new-ceo-brad-kreger-on-vision-for-revitalized-operations-and-market-resurgence-228066/

Thanks, good article.

Appreciate you posting the CEO interview. Unfortunately, company founders often do not make good CEOs & that appears to be the case with VLD.

I’ve been quite negative on VLD ever since their Q2 report when they reported their 2nd quarter in a row of negative Q over Q growth and established a new downward sales trend. I view the leadership transition as a positive step in the right direction but I need more information before I’d consider buying shares.

I’ve seen this story planned out too many times in the past when a new CEO comes in, especially in the 4th quarter. The CEO is going to make sure every possible write-down and financial hit is taken in the 4th quarter. He can then blame all of that on the prior leadership while positioning the books for the best possible results going forward under his leadership, in this case 2024. So the Q4 report will be a dumpster fire. That may impact the stock when they report but I think the Q4 call will really be about go forward guidance, their cash status, and if any additional near term funding is needed. I need to see where their cash is at and know I’m not going to get diluted later in 2024 before taking a position.

Do you think that all potentially bad financial facts have not been already discounted in the current stock price? The market is nearly all negative, but some bears like Perry on YMB turned bullish yesterday, and bear Lazerator turned cautiously bullish 1-2 months ago.

MM & All – what are your best probability guesses on the approval of V for AKBA on March 27th? Worth the risk to buy now?

Good question. AKBA stock is running into overhead resistance. The market believes there is a 90% likelihood of approval of V, so there will probably be only a little bump on approval. I bought more recently at $1.15, so perhaps we only get $2.00 the day after approval. The market believes the CEO to be a poor marketer, as shown by mediocre sales of Auryxia.

Thanks, makes sense.

MM–good comments on VLD, but please revise your buy and target price numbers to reflect current reality. To get to even your $6 buy price is highly speculative. I would be happy with even a $2 buyout at this point.

On APTO, what exactly did Carol J on YMB lie about? You have been giddy about Bill Rice’s development skills, while ignoring the dire financial situation. Carol J has been correct about the financial situation sabotaging the company’s ability to advance clinical trials. Her stock price forecasts have been correct.

Thanks for your info about Carol J. On VLD and other speculative stocks, it is wise to wait for the overall market consolidation you predict. Instead of buying more VLD at 25 cents, it may hit 20 cents in the consolidation.

Please be realistic about buy prices. You might not see VLD at $6 in the lifetime of yourself or several subscribers in their 80’s. VLD has a reasonable chance of increasing sales significantly, but not enough to breakeven in 2024, from your analysis of margins. It would be more useful to subscribers to have realistic expectations such as targets of $1-2 in a year or $5 in several years.

APTO – MM your targets below need to be adjusted to reflect the dilution associated with the additional shares/warrants they just issued.

Buy under $2.50 , ultimate target $300

When do you predict approval for TUS, and how long would commercialization take to achieve the $billions of sales?

It can’t be 2025 and 2026 isn’t likely either based on APTO’s latest corporate presentation, which shows their TUS/VEN registrational trial extending into 2026 (see attachment).

Using SCYX timeframes as a guide:
Phase 3 VVC trial completion 2020-Q1over 6 months to compile data package & submit an NDA to FDA in 2020-Q4,6 month review, FDA approval 2021-Q2.
Apply the same timeframes to APTO’s drug, assuming they finish their registrational trial in 2026-Q1, and FDA approval would happen 2027-Q2.

Screenshot 2024-02-06 at 3.15.39 PM.png
Last edited 11 days ago by Brent

Note that there is no mention of FDA approval in the TUS development slide above, which runs through 2025. There obviously would be if FDA approval was possible in 2025.

After APTO did a reverse stock split last June they ha 6,234,000 shares outstanding and you set they price target at $300 for a market value of $1.87 billion. So you were assigning less than a 2x multiple to TUS as a billion-dollar drug.
 
Based on the latest 8-Ks, we are now aware of what would have to be considered negative recent developments:

  • their current cash position only gets them through their current APTIVATE trial. They will need a partnership or capital raise to do a TUS/VEN registrational trial, which based on the slide in their 12/26/2023 corporate presentation will run a minimum of 6 quarters, extending into 2026.
  • the TUS/VEN/HMA triplet trial is on hold pending the search for a partner. A partnership means revenue sharing and APTO no longer receiving the full $1 Billion that you base your target on.

 
Yet, TUS is suddenly now worth an 8x to 10x or 4 to 5 times the multiple you applied to TUS just 8 months ago. What accounts for the massive increase?
 
A cynic would argue that the multiple has magically been inflated to the point that the target can be left as is. 

My main concern about APTO is how big the market really is for TUS and the others. Enrollment has been slow because those drugs will only be used in limited subsets of patients who have failed other drugs. That means the market is much smaller than other drugs.

Did anyone else “back the truck up” on Rocket Lab after the offering yesterday? This is my first time buying it, thankfully not at the $13 that MM recommended buying it originally. I could easily see this going 2x-3x this year.

Hey Doyle, why so positive on RKLB, what is/are the catalyst(s) and what’s the timing for the 2-3X?

Sounds interesting. But my major concern is the history of burned up rockets from Space X. Maybe the rate of exploded rockets is very low. What about satellites which is the big contract RKLB just got? RKLB’s margins are only 11%, so that doesn’t leave room for launch failures. (Still, that’s nothing compared to FDA explosions which kill a deserving biotech company, rather than a single launch.)

MM?

A 2% failure in launches reduces the margin from 11% to 9% or so. More significant financial risk.

NGENF looking like an irresistible force the past 2 weeks, closed at an all-time high today. Will likely move higher next week.
I saw some questions about MGB Biopharma on the previous board.They completed a Phase 2 C Diff trial in April of 2020 and had a post-phase 2 meeting with the FDA a month later. I can find no indication of how strong the P2 data was, but I think the fact they haven’t yet begun P3 nearly 4 years later indicates the program is pretty much dead.

Chris, have you checked out MCRB – Seres Therapeutics? They already have FDA approval for C-diff and it seems to be gaining traction. There is also potential for a buyout from their partner Nestle Health.

Thanks, but I am disturbed about the very real possibility that ACXP’s phase 3 won’t find a partner. (That may have happened with MGB-BP.) I would be happy if they did. With small numbers of 5 out of 5 patients having 100% 3 month cure rates, I highly doubt a buyout will happen without phase 3 being concluded. Without a partner, phase 3 will take forever. ACXP would plunge to $1 or 0 in that case.

Now we should assess the new approved C diff drug from Seres mentioned below by Doyle.

You could be right. It’s went down the last 7 trading days. But if any one can sell this company it would be Luci. He’s a lawyer very familiar with M and A. He’s sold the last several companies he was in. It’s his MO. He has a lot of shares and stated the goal is to sell.Even said he thinks he has spoken to the buyer.

Seres has an approved product called VOWST, since late June 2023. It is a capsule of fecal microbiota. Upon finishing the antibiotic for C diff, the patient starts the capsules for a 3 day treatment. Clinical studies showed 12% recurrence of C diff vs 39% recurrence on placebo. There were plenty of side effects in over 5% of patients. Clinically, it is highly likely that ACXP’s Ibeza has better outcomes with fewer side effects than Seres’ VOWST. It will be a much better solution for recurrent C diff than VOWST.

Seres stock is basing, with an attractive price/sales of 1. The next earnings release in early March will be crucial to see if sales are increasing. They had positive earnings in the June 2023 quarter, maybe from a one time cash payment, I don’t know.

If Luci gets a partner to do phase 3 for ACXP, there will be a bump which will partially peter out until the phase 3 is completed. But the odds are high that the phase 3 will succeed, and the stock target will be multiples of where it is now. If no partner, the stock will bust. A binary situation.

Seres YMB poster LUMIMAX talks sense. Op expenses are ridiculously high for the crummy revenue Seres gets. Bloated salaries? Just like ARTH, a 98% plunger.

Last edited 13 days ago by JGMD

I’m not saying that Seres doesn’t come with risks like ACXP, but it worries me that they only have 4 employees vs Seres that has around 431. Here’s another article I found that you might find interesting.

https://www.pharmavoice.com/news/pharma-gut-microbiome-vowst-nestle/704510/

Seres’ microbiome product is very worthwhile, but the business model is lousy. LUMIMAX on YMB is correct about that. Seres’ 431 employees to get breadcrumbs shows totally stupid management. ACXP’s mere 4 employees at its stage shows much better management. Everything depends on the CEO, David Luci getting a BP partner to fund phase 3, so who needs the wasteful spending at Seres? How is the company making Rebyota doing financially?

NGENF may be topping today, at least short term. I don’t have many shares, so FOMO keeps me from trading. We have many months to build a sizable position. With your big position, you probably have both a holding and trading strategy. I don’t know if options are a practical strategy for this thinly traded stock.

Any thoughts on SFTBY earnings call?

NVTA bankruptcy?

Seems like it,my life as I new it is over ,due to Murphys picks

It looks like a fund from Japan is selling 17 million shares

‘Invitae Hires FTI, Kirkland & Ellis To Advise Options To Address $1.5B Of Debt As Company Prepares For Bankruptcy; Co Has Been Selling Assets To Shore Up Liquidity As Business Tanks’ – WSJBENZINGA
11:12 AM ET 02/05/2024
https://www.wsj.com/articles/softbank-backed-medical-genetics-company-invitae-prepares-for-bankruptcy-d468f120?st=02yzwzf1bnabmx0&mod=googlenewsfeed
 
Invitae (NVTA), a medical genetics company that received backing from SoftBank Group at the height of the pandemic has hired restructuring advisers and is preparing to file for bankruptcy within weeks, according to people familiar with the matter.
 
The company is working with FTI Consulting and law firm Kirkland & Ellis to explore strategic options, including bankruptcy, to address $1.5 billion

Where is MM

The latest Seeking Alpha article speculated that NVTA had also been considering issuing a stunning 750 million shares to address their dismal financial situation. Obviously the news today, and the corresponding 60+% price decline, eliminates that option.

“The company’s potential strategy to secure additional funding at its current market valuation poses significant dilution risks for existing shareholders. To raise approximately $300 million, about 750 million shares would need to be issued, inflating the total share count to over 1 billion. This would result in a substantial dilution, reducing current shareholders’ equity to roughly 25% of their present holdings.”

MM’s due diligence on his portfolio of stocks appears to be limited to company press releases & presentations. Anyone looking at the trended financials could see they had deteriorated to the point that NVTA couldn’t continue on a business as usual basis and the required capital raise, if they could get it, would be extremely costly given the state of their business.

That´s another very big blow up!!!! My fault to listen again to MM!

MM INVITAe ?????

NVTA
BUY UP TO $10 for $59 t hen $100. Give me a break. Pity anyone who has not learned the lesson that …..when mm!s losers turn into. Pennies it’s time to exit. There. Is a good reason they turn into penny stocks that MM will ignore and spout the same old crap such as above. I do not hold ANY of his pfennig stocks

VLD may be an exception. They have world class tech, with reasonable prospects of a turnaround. NWI could be extremely profitable for a trader with enough patience to short the stocks at MM’s buy prices down to 2-10%, or just be patient to wait. Then buy and trade or even just hold from buy prices that are 2-10% of the recommended MM entry.

VLD has gone from 10 bucks to .25 cents in 3 years. This one doesn’t strike me as a winner. I did buy 1000 shares a couple years ago mainly because of it’s connection to SpaceX. Only down 92% 🙂

VLD is now down to $0.245 from $10, a 97.5% loss from the NWI buy price. I established a position a few months ago at $1.54 when MM said it was a gift. After the latest loan modification, I got more at $0.475, for an overall cost basis of 72 cents. If a turnaround is really occurring, my final buy will be at about 20 cents soon to get my cost basis down to less than 40 cents. My total VLD investment will be about 3% of my total portfolio. It the stock goes to $1 or more, then VLD will be a winner, but only from these low prices.

As I said, buying at MM’s recommended prices creates big wipeouts in most cases, as several subscribers have noted. The only way to win from NWI is to wait years until prices have plunged to 2-10% of original buy prices.

Whenever MM comes out and claims something is a gift, run hard the other way. How many “gifts” has he pushed that are now either bankrupt or pennies?

Perhaps MM used to be a good stock picker but he certainly isn’t now.

He isn’t doing anyone any favors with this newsletter. Shutting it down would save people tons.

It does make sense,let’s see how he tries to say he didn’t see this happening to nvta,oops my bad

MM’s stock picks are still interesting. But the buy and target prices are way off. It’s up to subscribers to figure out how to play the stocks. Be a nimble trader, knowing that the odds are against the average trader. Or wait years until the stocks are down 90-98%, then buy and hold. If the stocks still go bust at a high rate, at least the reasonable % of winners can offer 10-100x returns. Then the overall returns will be excellent.

But remember it was a buy up to 50.00 a share in 2021,he sure did screw us on nvta,so much for his research,which didn’t amount to shit,Sean George doing everything right

winner take all in genetic testing!!! MM has cost me a ton all his price targets are ridiculous!! Thx again Murph – you can really pick em

You and me both,unf..king believable

Probably in the bunking,trying to figure out how to address us with nvta

Who is Sean George? He has a newsletter?

Sean George was the ceo of nvta in 2021,he was the master mind who convinced MM how great the things were going at nvta,and in turn that’s why MM had been so strong about the future of the company being able to become the Amazon of genetic testing and why he put a share price on it of 100 a share plus and why he pushed it so hard onto the nwi membership

This should be a lesson for MM and all of us not to trust most people. Do your own DD to avoid bias. A financial advisor should answer to subscribers–do DD, verify, think for yourself. Don’t merely regurgitate company presentations that are readily available.

AND update buy/target prices in the light of current realities. VLD buy below $6 is completely unrealistic.

Anyone know how many MM stocks have gone to zero?

PLTR slight beat, guides up for 2024. The perfect mixture between war and AI. Up nicely after hours.

MM, Any thoughts on Invitae?

The way the trading stopped in NVTA is totally crooked,people should go to jail for this…..

NVTA – NYSE to Commence Delisting Proceedings Against Invitae Corporation (NVTA)
The New York Stock Exchange (“NYSE” or “Exchange”) announced today that the staff of NYSE Regulation has determined to commence proceedings to delist the common stock of Invitae Corporation (the “Company”) — ticker symbol NVTA — from the NYSE. Trading in the Company’s common stock will be suspended immediately.

NYSE Regulation has determined that the Company’s common stock is no longer suitable for listing based on “abnormally low” price levels, pursuant to Section 802.01D of the Listed Company Manual.

The Company has a right to a review of this determination by a Committee of the Board of Directors of the Exchange. The NYSE will apply to the Securities and Exchange Commission to delist the Company’s common stock upon completion of all applicable procedures, including any appeal by the Company of the NYSE Regulation staff’s decision.

https://www.businesswire.com/news/home/20240206569052/en/NYSE-to-Commence-Delisting-Proceedings-Against-Invitae-Corporation-NVTA

So NVTA will likely move to the OTC and begin trading at some point. But a bankruptcy announcement in the next couple weeks is probably the most likely outcome.

Chris–on ACXP, a recent story indicates that they are preparing for the end of phase 2 meeting with the FDA in Q2, then design of the phase 3 trial with start of that late 2024. So there is no immediate pressure on CEO Luci to nail down a deal with a partner for phase 3. The only hope is that the FDA will say the phase 2 data is impressive, and only a few hundred patients will be needed for phase 3. But even the small phase 2 was stopped to save money. I envision a steady decline in the stock for the next 6-9 months to much lower levels.

Your view?

BP will want to know the results of the EOP2 meeting so they have a better idea of what is needed to get approval. After EOP2 they will have that idea and offers can be made. Look at the Board of Directors. The ACXP Bd has connections to a number of BP topdogs.

As to NGENF, I would encourage anyone to envision how much the company could potentially be worth. The cost of SCI in the US is about $50B annually. Stroke costs even more (57B). MS even more (85B). Without even considering the value of NervGen’s drugs for AD or MI, you will see that NGENF has the potential to be a multi-billion dollar company. I consider $10B or more a very real possibility. Given success in the current trial, I see a minimum valuation of $1B as a given. Current MC is $215M. At $1B that will be a 5 bagger from here, My more optimistic valuation of $10B minimum would be a 50-bagger from here. When NGENF was 1/2 the current price I said it could be 100x higher and I still say that.

Call me old fashioned but I believe in buying low and selling high. It is still low. Very low. You should have already bought a good position. But the fact is we don’t know whether or how much lower the price may go between now and data released this summer. When the stock was under $1.20 a couple months ago, I expected it to be much higher by the second half of 2024, but I didn’t expect it to be up 100% by early February. My advice to anyone would be to take a good position now (maybe half a full position) and add shares if it drops below 2.25 and add again below $2. Then if it goes over $10 6 or 7 months from now, sell some to recover your initial investment and let the rest ride.

Thanks, Chris. I am just as optimistic as you about NGENF’s clinical success. HOWEVER, I believe you are making similar errors that MM makes in determining a realistic target price. MM gives good estimates of market potential of a biotech product. Or even a great tech company like VLD. But he doesn’t figure in the delays in getting approvals. Time is money, and he ignores the guaranteed many rounds of dilution to get funding, or accepting a fraction of the sales the partner produces. For VLD, there has been big sales declines and financial trouble, so that now the price of 20 cents represents a full 98% decline from the buy price of $10. Next, the politics of the FDA and jealous competitors who are doing great business with accepted but inferior products. Take ARTH. It was obvious that their AC5 is far superior to the bandaids of JNJ, Baxter, etc. These companies aren’t primarily interested in saving lives–they want to protect their well established businesses. They gang up with the FDA to sabotage newcomers like ARTH. Like politicians and the courts, they invent legalise verbiage to refuse to admit evidence, saying that parties have no standing, and other dishonest crap. For NGENF, the makers of steroid injectables for epidural injections do great business, the parasitic hospitals and outpatient clinics benefit from repeated insurance payments for this well accepted but risky treatment. I can see the headlines of the miracle treatments from NGENF for spinal cord injury (SCI), how all the victims will demand the treatment. But who is going to pay for the treatments? Insurance companies will stall for as long as possible with excuses that NGENF is still investigational/experimental. Hogwash, but they will get away with it for some time. The victims are disabled and not employed, so they have nothing except medicaid or lousy VA disability benefits. The VA system is 19th century primitive, and doesn’t even authorize MRI’s for basic assessment of most ortho/neuro conditions. When I have a patient with significant shoulder pain, the X Ray is usually worthless. It only shows bone problems, but only the MRI shows cartilage or tendon damage. The typical VA patient gets no proper care, and his only hope is when he gets out of the VA system and gets a job that includes private insurance.

On the bright side, if only 20% respond to NGENF’s treatments, that will be life changing for them. It’s better than the present treatment which is mainly custodial care and a tragic existence for all of them. Due to my above analysis, I don’t see us making 50x our investment, but more like 5-10x, still worthwhile. We might even get there this year just from excitement, way before approval. I do hope your more optimistic view is correct for the long term, after stroke and other neurological trials are completed. I will live a happier life in general if my cynicism is overturned.

On ACXP, waiting only until Q2 for the EOP2 meeting gives me more hope that P3 will be funded sooner than later. If no partner, how much money would it take for a phase 3 to be done? Much more than the $7 million in cash that ACXP has? Maybe it wouldn’t take that much stock dilution to get it.

ACXP’s plan all along, if they don’t accept a buyout offer prior to a Phase 3 trial has been to do two Phase 3s. The first one will be a smaller one they’d fund, then they’d do the M&A process again based on the results.

They set up a $17M ATM stock agreement in November. The CEo said in a recent interview “we’ll know exactly if we have enough cash after we meet the FDA. We’re getting bids now from local CROs for international clinical trial work. We either have enough cash right now with our ATM in place and the cash on hand or we might have to inch up just a wee little bit depending how things go with the FDA. But it won’t be anything dramatic. Nothing close to the money that we raised on the ATM.”

I’m quite optimistic they’ll find a buyer before doing a phase 3. THat’s really been their plan all along and what this CEO has been hired to do. Pfizer, Perck, Sanofi & Summit have all tried and failed with C Diff drugs, so there is broad interest. GSK may even want to be in the space given they have a presence in gut drugs with SCYX. I think one of these companies will try to beat the others and make ACXP an acceptable offer. Once the ACXP drug is approved it will be tough to do trials against. The CEO had also indicated in a past interview that they had 2 to 4 additional molecules based on the same MOA that they’d be bringing to preclinical this year. We know one is for MRSA. So any acquirer will get additional value although that is further down the road. While their patient numbers have been small I think the data has shown that their MOA works but acquirers will leverage the small numbers in their offer price.

Thanks. The ATM amounts to stock dilution I guess. How much % ? That reduces the target price when Ibeza is approved. I assume the CRO’s can get the trials done more efficiently with the required fairly large numbers of patients required, than ACXP doing it alone. For the phase 2’s, did ACXP need the CRO’s, or did they do it alone? It takes money to recruit the doctors and get the patients in the studies.

I’m surprised the C diff field has been so difficult (tasteful pun). Doctors are trained to use narrow spectrum antibiotics for all infections. That reduces the disruption of the microbiome. Ibeza is narrow spectrum. Example– for a strep throat, use narrow spectrum penicillin or amoxicillin, not levofloxacin. For urinary infections, use amoxicillin, septra, or even cephalosporins as determined by the culture and sensitivity. Don’t use broad spectrum antibiotics like cipro or levofloxacin, but unfortunately most urologists use broad spectrum. Dumb–doctors like this are responsible for the scourge of C diff. And many doctors treat upper respiratory infections with antibiotics, when most of the time, the infection is viral, and antibiotics are ineffective. For mild urinary infections, use a natural non antibiotic agent like d-mannose. In most cases, my patients get better using d-mannose, so I can avoid using antibiotics in most cases.

Nvta is trading

Nvta is trading for .02 cents a share.

Unbelievable from 50 plus to .02 cents. Has Cathie Wood sold her shares?

agreed has to be the best pick MM has ever had,cant tell if cathie woods sold hers most likely not at this price,most likely waiting for clarity from the company

dollar cost averaging on nvta didnt work in my favor,in turn this investment has set my portfolio back years ,dumb money like the movie,goldman sack and piper sandle have won..they have destroyed this company

Investor place had an article back in Dec recommending sell NVTA. Wish I had dumped all my shares then but was hoping things would turn around.in the next earnings report like others on here. NVDA hit $700 today Wished MM would have continued coverage on this one.

i guess we were all hoping for MM to be correct with nvta

ARM holy crap. They blow out numbers and get 5 upgrades.