October 12, 2018 8:05am

Show me the turn, a greening of futures and then rebalance portfolios to stay defensive

Oversold is a temporary state but, sustainability is the key aspect of a recovery!

 

See: Watch List and SELL List

Financing: Verastem Oncology (VSTM) prices a $150 M Registered Direct Offering (RDO) of 5% Convertible Senior Notes due 2048. Lazard Frères & Co. LLC acted as placement agent in connection with the offering of the Convertible Notes.

 

I follow the dictum, quoting Churchill that “short words are best, and the old words when short are best of all.”

Markets tank, but they recover. The sector will shudder, but they will adjust as they always do. The take-away, don’t dwell on what’s happened but, learn the lesson of investing in those who meet expectation - SUBSCRIBE!

U.S. stock index futures are skyward

Dow futures are UP +1.01% (+265 points) and NASDAQ futures are UP +1.55% (+109 points)

 

U.S. stock index futures rose sharply ahead of Friday's open, bouncing back from the heavy losses seen in the previous two sessions.

European stocks bounced back, with global sentiment turning more positive

Asian markets bounced back after trading largely mixed earlier in the session.

 

Data docket: import and export price index data are due out at 8:30 a.m. ET, followed by consumer sentiment at 10 a.m. ET.

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is indicating a +1.49% UPSIDE in Friday’s pre-market;

  • The SPDR S&P Biotech ETF (XBI) is indicating in a +3.7% UPSIDE Friday’s pre-market;

  • The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Friday’s pre-open;

  • The iShares Russell 2000 (IWM) is indicating a +1.22% UPSIDE in Friday’s pre-open

 

Henry’omics:

U.S. stock index futures rose sharply ahead of Friday's open as worries over rising rates subsided and tech shares rebounded from steep losses earlier this week.

Show me the upside …

 

From Thursday’s night’s newsletter: “whiplash!

The iShares NASDAQ Biotechnology (IBB): a week’s history lesson; for a five session aggregate of -7.68% - at the least consider an upside move after 5 negative sessions out of 5!

Of the 45 companies covered on Thursday; 38 downside equities finished in a range of -0.10% (ADVM) to -9.04% (BOLD) while 7 upside equities oscillated from +0.85% (CRSP) to +8.85% (BTX) with a 0 flat close.

Volume has been increasing … look at the depth – 5 out of 7 of the upside had higher (than the 3 month average) volume while the downside spiked with 24 having greater volume (than the 3 month average) out of 38.

  • In 9 sessions in October – there were 8 negative closes and 1 positive close
  • In 19 sessions in September – there were 10 negative closes and 9 positive close;
  • In 21 August sessions – 6 had negative and 15 had positive closes

 

Financing:

Verastem Oncology (VSTM) initiated and priced an offering of 5% Convertible Senior Notes due 2048 (the Convertible Notes) through a registered direct offering. The aggregate principal amount of Convertible Notes to be sold in the offering is $150 million. The Convertible Notes will be unsecured, will bear interest at a rate of 5.00% per annum, paid semi-annually in arrears, and will mature on November 1, 2048, unless earlier converted, redeemed or repurchased in accordance with their terms prior to such date.

The net proceeds to VSTM from the offering of the Convertible Notes are expected to be approximately $145.4 million, after transaction fees and expenses.

The net proceeds will be used by VSTM for the continued clinical development of COPIKTRA (duvelisib) and its other lead product candidates, and the balance to fund working capital, capital expenditures and other general corporate purposes, which may include the acquisition or in-license of additional compounds, product candidates or technology.

Noteholders may convert their Convertible Notes into shares of VSTM’s common stock, together, if applicable, with cash in lieu of any fractional share, based on an initial conversion rate of 139.5771 shares per $1,000 principal amount of Convertible Notes, which represents an initial conversion price of approximately $7.16 per share, an approximately 15% premium to the last reported sale price of VSTM’s common stock on Thursday, October 11, 2018. To the extent VSTM has insufficient authorized but unissued shares to settle conversions in shares of its common stock, VSTM will settle the deficiency in cash.

Lazard Frères & Co. LLC acted as placement agent in connection with the offering of the Convertible Notes.

 

Companies in my headlights – It’s your decision; I provide an idea and context:

Watch list of BUYING opportunities:

Audentes Therapeutics (BOLD) on offering close

AxoGen (AXGN)

bluebird bio (BLUE)

Cellectis SA (CLLS)

CRISPR Therapeutics (CRSP)

Editas Medicine (EDIT)

Intellia Therapeutics (NTLA)

Global Blood therapeutics (GBT)

Regenxbio (RGNX)

Sangamo Therapeutics (SGMO)

 

SELL candidates:

Spark Therapeutics (ONCE) exhibits a negative aftermarket reaction -$0.94 or -2.01%

 

 

Opinions expressed are those of the author and are subject to change, and not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors.  All investments are subject to risks. Investors should consider investment objectives.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.