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Valyooo (99.01)

Discovery labs

Recs

11

December 28, 2010 – Comments (10) | RELATED TICKERS: WINT

The ticker got changed from DSCO to DSCOD and now the shares are down 20%.  Is there any correllation?  I know why the ticker got changed, but do you think people are now dumping it because the whole reason they bought it was that it was a penny stock, and now that its over 4 dollars it psychologically not as exciting? I can't decide if i should sell or not

10 Comments – Post Your Own

#1) On December 28, 2010 at 11:06 AM, Momentum21 (99.47) wrote:

My hypothesis is that it ran 50% in one day and was due for a pullback. Shareholders knew about the split weeks ago but I am sure the timing came as a bit of a surprise to some...especially those who just wanted to go along for the ride yesterday.

In most cases reverse splits are bad...in this case I think it is positive.

As with most biotechs, when I bought this stock I prepared myself for the very real possibility of seeing zero so it's all good in my book.

Good luck... 

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#2) On December 28, 2010 at 11:46 AM, Valyooo (99.01) wrote:

Why do you think its positive in this case?

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#3) On December 28, 2010 at 12:11 PM, Momentum21 (99.47) wrote:

They avoid delisting from Nasdaq which is the news that sent shares to all time lows earlier this month.

At this point further dilution doesn't appear likely in the near term but the ability to raise cash is the only thing between four bucks and a big fat goose egg if delays occur. 

I am not trying to talk it up because the stock is only incrementally less risky then last week. But I am still long and sold half my stake (yesterday) from an initial cost of 2.65 so I think that makes it easier for me to see both sides more clearly.

zzlangerhans (or Porte) would be a better resource than I on this stock. it appears that he still has a pretty big position but if you read his posts on it he does disclose the risk involved.  

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#4) On December 28, 2010 at 10:26 PM, BlackSwanCapital (43.20) wrote:

I asked porte casually, I don't think he responded yet.

I've been following DSCO loosely and saw it run up crazily yesterday.  I thought for sure it meant that someone got the scoop before the general public.  No news yet...


I agree that generally a reverse split is a bad thing (always no?).  The timing seem suspect..., and I think the abruptness threw some people off.  It looks like a more expensive stock now, and the yahoo finance boards are embarassingly spouting information like:  It was a buy at 36 cents but it's not worth $5.40.

its the same thing, so I guess what momentum said is right.

 

Still, a 50% run-up?  I'd think that someone was in the know and I could only assume that with that kind of an insider line they must have known about the reverse as well.

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#5) On December 29, 2010 at 1:46 AM, zzlangerhans (99.85) wrote:

The issue here isn't the "run-up" from 0.17 to 0.36. I thought this stub was undervalued at 0.70 and I started buying it at 0.55. 0.17 was just ridiculous. When stocks get that low there's a certain degree of chaos and just about anything can happen short-term. I don't think the recent price activity means anything from a catalyst perspective, but everything I have learned over four years indicates to me that the market cap should be over 200M by April. I have no idea how fast or how chaotically it will get there.

The issue from a six month outlook is that there is a high probability that Discovery will have an FDA-accepted NDA for Surfaxin by March or April with a PDUFA in July or August. If you believe that they won't get that far, or if they do it's only worth a market cap of 50M then stay away from this stock. Otherwise, it's probably better to hold into the summer and avoid the temptation to play the chaos. You're more than likely to see the train leaving the station without you.

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#6) On December 29, 2010 at 2:28 AM, Valyooo (99.01) wrote:

Hey zz, you're the one who got me into this stock.  I had heard of it years ago, but didn't really follow it.

To be honest, I don't really know anything about biotech, and I especially don't know anything about Discovery.

To me this is a trade, not an investment.  My logic was, if this stock was worth 0.74 to people based soley on speculation, then a fast track or whatever they got should make it worth more than 74 cents.  However, since I don't know much about the company, who the hell am I to say the company should be worth more?  So, I bought it at 0.22 and decided to sell it at 0.50.  No real science to that (and I usually dont sell at such round numbers) but I figured even if the nasdaq delisting + fact that it may have been overvalued at 74 cents (apparently not according to you) makes it deserve a 1/3 haircut, the share price should be 0.50, so I had an upside of 0.28 and a downside of 0.22, and I liked it.

Maybe its stupid to trade a company you don't really understand but to me it made sense. I just can't decide if I should load up on this price or not.

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#7) On December 29, 2010 at 2:29 AM, Valyooo (99.01) wrote:

Also, on yahoo finance, DSCOD is listed to have a market cap if 814M.  Where are your getting your info from, as mine is clearly wrong?

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#8) On December 29, 2010 at 5:31 AM, Nickalisk (40.48) wrote:

They haven't recalculated the decreased shares.

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#9) On December 29, 2010 at 5:53 AM, portefeuille (99.26) wrote:

#4,5 I agree with zzlangerhans. The "questionable" part was the drop to 0.17 USD, not the subsequent rise. DSCOD shares are currently my third largest position (3800 shares, see comment #16 here).

my current top5 long positions (ratio of value of the position to value of all long positions).

ALNY (16.5%), EMC (9.5%), DSCOD (4.3%), TKMR (3.7%), VOW:GY (3.3%).

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#10) On December 29, 2010 at 5:55 AM, portefeuille (99.26) wrote:

and I think I will keep at least 2000 of those for a few more months ...

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