Good evening! $TXMD presented at a conference this morning, and $GME soared 16% as buyout talks get 'real'. I wanted to update my perspective on both.
I went long $GME earlier this summer via October $17 calls. My vision was a move higher.... obviously, one that would see the stock head over $20 a share.
$GME looked well on its way moving from $13's to $17s in the span of a few weeks. Those $17 calls soared from $.40 to $1.20 and at the time I was able to lock in some gains. Little did I know the stock last week would lose all those gains and then some.
On the decline, because I believed the stock was still going to move higher into the fall, despite the recent collapse, I entered more Oct $17 Calls.
Heading into this week I was expecting the stock to recover...
... and rocket back up it did. What a move the last two trading sessions for $GME with today's 15% gain the stocks best since 2008!!!
My premise for going long $GME was not a buyout, but the value. I thought the stock was under valued. I thought the shorts perspective of the stock was wrong. At the end of the day it may not matter as $GME is in 'advanced stage' talks, according to dealreporter, to sell the company.
An analyst chimed in later in todays session with a possible price range for a $GME buyout of $22 - $32 a share. I was thinking all along around $20-$21, which will be an excellent return on the calls. $22? $23? amazing.
However, like I did before $VSI's 100% move, I will try to temper my enthusiasm. I think if $GME does not get an offer, or a possible deal is not announced, the $3+ EPS and 10% dividend remain two of many reasons why this stock is still way undervalued. You can read my thoughts here:
What do I think right now? With $GME earnings tomorrow after the close, I wouldn't be surprised if we awoke up to a nice buyout offer before the bell. I don't think its just a coincidence that these talks get hot and heavy on the eve on earnings.
What was just rumors and possibility just a few months ago has morphed into something real. And with almost 40% of the float short, I think we could see continued short covering until we get a deal... or no deal. With my thoughts a $20 -$21 buyout and analysts thinking $23 - $32, you can figure out where the price action could end up over the next few weeks if the talks continue.
And with that lets move to $TXMD.
$TXMD presented at a conference in Boston today.
The PowerPoint presentation is here: Presentation
There is also audio provided, you can listen to that by heading here: Presentation Audio
The Imvexxy launch is going very well and will get a bigger lift when the smaller dose version launches next week.
The company, if TX-001HR gets FDA approval in October, will have 3 FDA approvals this year! And yet the stock trades for the same price it did 4 years ago when it had ZERO FDA approvals and a very uncertain future. Dilution and delays had the shorts borrowing over 40% of the float and selling those shares, betting on failure. And after many years the company is finally starting to show the fruits of their labor. I don't see failure... a matter a fact potentially 3 FDA approvals this year is about as successful as you can get, and why I am betting on upside via calls.
If you haven't read my previous thoughts on $TXMD, here they are:
One final note from the presentation that stuck with me, is the slide regarding share ownership:
Insiders own some 21% of the outstanding shares. Institutions over 55%. That is roughly 76% of the outstanding shares in some pretty tight hands. That's a good sign for shareholders.
I also liked late last month when a company insider bought stock in the open market. A little over $20k worth. Not exactly a huge insider buy, but symbolic none-the-less. That's a good sign for shareholders.
The stock has a massive short contingent. I think that has been weighing on price over the years. Usually when you see a huge short position in a company you stay away! The shorts are usually right! I think they were right..... at least up until May this year when the company got FDA approval for Imvexxy. Now the approvals are rolling in. The shorts were betting on failure, and yet the signs are all pointing toward success.
While the stock did soar over $10 briefly in late 2016, the range over the last 5 years has been between $4 and $9.
Almost 14 million of the 40+ million shares short are already underwater as they were established when the stock was trading from $5.50 to $4.50. I think a move over $9 would put almost every short position underwater. But again, this isn't a short squeeze trade. However when/if the shorts start to cover, the upside move could get an additional lift.
I bought more December calls this week and also own October calls. I am now looking to get calls for 2019. I still think here, today, that going long this stock is cutting the line. Four years ago the stock was trading right around where is is trading today, and that was with ZERO FDA approvals. Today the company is on the cusp of three FDA approvals in one year and one product already showing tremendous, and better than expected demand.