August 14, 2020 8:15am

Reason: Inflated optimism strokes volatility

Pre-open indications: 2 BUYs and 2 SELLs <the Biostage (BSTG) Chronicles>

Breaking News: Mesoblast (MESO; ASX: MSB) the Oncologic Drugs Advisory Committee (ODAC) of the U.S. FDA voted overwhelmingly in favor that the available data support the efficacy of remestemcel-L (RYONCIL™) in pediatric patients with steroid-refractory acute graft versus host disease (SR-aGVHD).

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Dow futures are DOWN -0.19% (-53 points), S&P futures are DOWN -0.04% (-1.25 points) and NASDAQ futures are UP +0.28% (+31.50 points)

 

U.S. stock futures pointed to a lower open yet the Nasdaq is up;

European markets traded lower as investors monitored concerns over a second wave of coronavirus cases and awaited second-quarter euro zone GDP (gross domestic product) growth estimates. The pan-European Stoxx 600 fell 0.6% in early deals;

Asia-Pacific markets traded mostly higher but investors remained cautious after U.S. lawmakers seemed unable to move forward with a coronavirus stimulus bill.

Data Docket: jobless claims

 

Henry’omics:

The Dow and S&P retreated as lawmakers seem unable to move forward with a coronavirus stimulus bill …

 

Thursday night’s post title – “two (2) previous down sector sessions ensured a rebound with NO significant news, it’s still a speculative and earnings’ driven sector”

  • The NASDAQ closed UP +30.26 points (+0.27%);
  • The IBB closed up +0.14% and XBI also closed up +1.38%;
  • Sector volume was LOW with 0 of the 19-upside having higher than the 3-month average volume and the 1 of 11-downside having higher than the 3-month average volume;
  • The CBOE Volatility Index (VVIX: INDEX) was down -0.15 points or -0.67% at 22.13;
  • Thursday’s percentage (%) of the 19-upside were +0.21% (IONS) to +4.33% (ATHX) while the 11-downside ranges from -0.38% (VCEL) to -16.04% (ADVM); 

Last five (5) sessions:

  • Thursday closed positive with 19 advancers, 11 decline and 4 flats
  • Wednesday closed negative with 13 advancers, 19 declines and 3 flats
  • Tuesday closed negative with 3 advancers, 32 declines and 1 flat
  • Monday (8/10) closed positive with 25 advancers, 8 declines and 2 flats
  • Last Friday closed positive with 21 advancers, 11 decline and 3 flats

Q3 so far:

  • August, 5 positive closes and 4 negative closes
  • July -11 positive and 11 negative closes with 1 holiday

 

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

Maintaining Sell:

Biostage (BSTG) closed down -$0.22 to $2.65 after Wednesday’s flat ($0.00), Tuesday’s -$0.02, Monday’s +$0.19 and last Friday’s +$0.20.  Keep writing those checks to “PUMP” the share price.

Remember, there are millions of private placement millions unregistered shares (priced at $3.20, $3.60 and $3.70) existing FAR beyond the outstanding shares with more coming …

Question: now that Q2 “numbers’ are announced, a -$1.2 M net loss or -$0.14 per share with only cash of $600 K and debt of 400 K; what happens to the clinical trial initiation and who ever remains an employee? The term – “going concern”, it’s even more UGLY when all this could have been AVOIDED! Also, remember the strategic plan for “forward motion” that was TOTALLY disregarded.

Mrs. bin Zhao, the major stock holder and head of DST Capital, BSTG’s funder: if you had stuck to the original turn-around plan, BSTG would NOT be in this position! YOU will also be held RESPONSIBLE IF and WHEN the Feds step-in.

  • Facts are irrefutable and the First amendment of the U.S. Constitution protects American’s free speech.

 

BUY:

Mesoblast (MESO) closed flat at $11.81 after Wednesday’s +$0.48, Tuesday’s $11.33 and Monday’s $17.42 and has a positive +$5.80 or +50.72% aftermarket indication;

Fate Therapeutics (FATE) closed up+$0.90 to $35. and has a positive +$0.74 or +2.11% aftermarket indication;

 

SELL into strength:

Editas Medicine (EDIT) closed up +$0.57 to $35.32 after Wednesday’s +$0.56, Tuesday’s -1.32 and has a positive +$0.22 or +0.62% aftermarket indication;

 

The BOTTOM LINE: I’m on vacation but, still watching!

Market prices have gotten ahead of the fundamentals, so those expecting a short-term economic recovery will be disappointed. The road to reopening promises to be long and challenging.

It is still early to understand the full impact of one of the largest economic drops ever witnessed.

Recession or depression, they're both …’ions!

Remember, the 6 W’s: Who, what, where, when, why and what of it

 

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.