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Player Avatar zzlangerhans (99.82) Submitted: 5/9/2013 1:36:20 AM : Underperform Start Price: $1.59 AFFY Score: +17.88

What the hell's been going on with Affymax the last couple of days? In March and April management announced they were considering bankruptcy and essentially fired themselves as they turned over control of the company to a restructuring firm. That doesn't seem like the actions of a company expecting to turn their fortunes around with a fix of the Omontys hypersensitivity problem. Yet in the darkest hour, Affymax has roared back from 80 cents to $1.15 yesterday and a high of 1.6 today before fading towards the close.

Is it a leak of a solution to the Omontys problem? Will Affymax be trading at $20 in a few days, making millionaires of the lottery pickers who bought big below a buck? I think not. In order to get the answers to the questions, one needs look no further than the nexus of biopharma malfeasance, Seeking Alpha.

On Tuesday this article seekingalpha.com/article/1409951-affymax-could-be-the-best-reversal-play-for-2013 was published on the site at 14:49. The author of the piece has obvious motivation to pump the share price as he is severely upside down on a bad trade he describes here: http://seekingalpha.com/article/1285031-affymax-swift-actions-seen-on-former-biotech-darling . Those shares were bought and the article published just before the stock was cleaved in half again in March when management raised bankruptcy as a serious option.

Despite the fact that this author walked into a buzzsaw in March, retail traders seem to be eager to follow him into another spec trade on the same stock less than two months later. But wait, you say - the run in Affymax started just after the open on Tuesday and the article wasn't released on SA until the afternoon! So my cause and effect scenario must be wrong!

Not at all. Seeking Alpha has a policy of front-running articles that they suspect will move share prices to their premium subscribers. Seeking Alpha wants to make money by commoditizing the poorly researched and written pumpery that they publish. Why let the stock manipulators have all the fun? Apparently it is legal by SEC rules to do this, although I can't imagine why. Now, there was no disclaimer on the article saying that it had been front-run, but do you think for a moment that SA "editors" don't recognize an opportunity to funnel a hot pump ahead of publication to their friends in hedge funds, their other friends with money, and their families completely outside of their little premium subscription gig? Is it illegal for them to do that? It's not inside information about the company, just inside knowledge that a manipulative article is about to be published and a lot of suckers are about to get fleeced.

Perhaps I'm wrong and the pumper, I mean author, is right. Affymax will be a 20 bagger and I'll have missed the best opportunity of 2013. But I've been watching these dramas unfold for more than six years now and at least in the virtual world of CAPS, this is the direction I feel comfortable playing it. In reality, I wouldn't dreaming of shorting here.

Member Avatar puccini3005 (29.79) Submitted: 5/9/2013 11:09:06 AM
Recs: 0

thanks for shedding some light on this...
Here's some news links you alluded to in paragraph 1, that have been buried in the superfluous sue-if-you-lost-money-on-your-affy-investment press releases:
http://finance.yahoo.com/news/affymax-says-considering-alternatives-including-122624529.html
http://www.investors.affymax.com/releasedetail.cfm?ReleaseID=749298

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