December 16, 2022 4:45pm
Options expiration, investors selling into year-end and algos taking the market and sector down
News: Avrobio (AVRO) keeps diving (-$0.0291 to $0.76 with 528,958 shares traded after Thursday’s -$0.0028 to $0.79 with 160,528 shares traded) as de-listing continues, hoping for a reverse split followed by a $250 million Cowen offering to “solve” its issues? Shareholders continue to lose value and CEO Mackay needs to go!
Why do I keep writing this blog/newsletter; to inform investors, what others won’t say or write
If I have learned one thing as a former research analyst in a venture and public fund now a journalist; it is that your life and your bank account are largely tied to your knowledge of price movements and questioning pricing targets.
The Dow closed DOWN -281.76 points (-0.85%), the S&P closed DOWN -43.39 points (-1.11%) while the Nasdaq closed DOWN -105.11 points (-0.97%)
We need to understand the macro to comprehend the micro re “our” universe of cell and gene therapy companies …
Indexes have been falling this week in the wake of the Fed’s 50 basis point interest rate hike on Wednesday — the highest rate in 15 years and fear of upcoming recession.
“Trading was especially volatile Friday with a large amount of options expiring. There are $2.6 trillion worth of index options set to expire, the highest amount “relative to the size of the equity market in nearly two years.” <Goldman Sachs>
Indexes notched a third session and second consecutive week of losses.
Economic Data Docket: The Purchasing Manager's Index (PMI) dropped sharply to 44.6, below November's 46.4 number and well below Econoday's consensus forecast of 46.7. The flash PMI combines both manufacturing and services into one index.
Friday’s … RegMed Investor’s (RMi) Pre-Open: “finally Friday following a rough week.” … https://www.regmedinvestors.com/articles/12747
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – quite a difference
- Friday’s advance/decline line opened negative at 6 up/ 28 down and 1 flat, stayed negative with 7 up/ 28 down and 0 flat at the mid-day, ending with a negative close of 16/19 and 0 flat.
- Thursday’s advance/decline line opened negative at 4 up/ 29 down and 2 flats, stayed negative with 9 up/ 25 down and 1 flat at the mid-day, ending with a negative close of 6/28 and 0 flat.
- Wednesday’s advance/decline line opened positive at 20 up/ 13 down and 2 flats, flipped negative with 13 up/ 22 down and 0 flat at the mid-day, ending with a negative close of 12/23 and 0 flat.
- Tuesday’s advance/decline line opened positive at 21 up/ 13 down and 1 flat, stayed positive with 20 up/ 14 down and 1 flat at the mid-day, ending with a positive close of 26/8 and 1 flat.
- Monday’s advance/decline line opened positive at 27 up/ 6 down and 2 flats, stayed positive with 28 up/ 6 down and 1 flat at the mid-day, ending with a positive close of 30/3 and 2 flats.
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Friday, the IBB was down -0.92% and the XBI was up +0.31%
- Thursday, the IBB was down -1.82% and the XBI was down -2.85%
- Wednesday, the IBB was up +0.54% and the XBI was up +0.33%
- Tuesday, the IBB was up +1.52% and the XBI was up +1.62%
- Monday, the IBB was up +0.79% and the XBI was up +2.51%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Friday was down -0.36 points or -1.58% at 22.47
- Thursday was up +1.65 points or +7.81% at 22.79
- Wednesday was down -1.20 points or -5.32% at 21.35
- Tuesday was down -2.47 points or -9.88% at 23.53
- Monday was up +2.18 points or +9.55% at 25.01
Closing Down (10 of 19):
- BioLife Solutions (BLFS -$1.19 after Thursday’s -$0.63 and Wednesday’s -$0.52),
- Fate Therapeutics (FATE -$1.13 after Thursday’s -$1.16 and Wednesday’s -$1.00),
- CRISPR Therapeutics (CRSP -$1.09 after Thursday’s -$2.69, Wednesday’s -$0.51, Tuesday’s -$0.36 and Monday’s +$2.07),
- Biostage (OTCQB: BSTG -$0.80),
- Solid Biosciences (SLDB -$0.29 after Thursday’s +$0.22 and Wednesday’s +$0.16),
- Verve Therapeutics (VERV -$0.25 after Thursday’s -$3.09, Wednesday’s +$0.16, Tuesday’s -$0.32 and Monday’s +$1.12),
- Cellectis SA (CLLS -$0.22 after Thursday’s +$0.05),
- AxoGen (AXGN -$0.17),
- Homology Medicine (FIXX -$0.13),
- Mesoblast (MESO -$0.11),
Closing Up (10 of 16):
- Alnylam Pharmaceuticals (ALNY +$7.55 after Thursday’s -$4.54, Wednesday’s -$3.07, Tuesday’s +$1.12 and Monday’s +$4.53),
- Chinook therapeutics (KDNY +$0.61),
- Vericel (VCEL +$0.53 after Thursday’s -$1.74, Wednesday’s +$1.22 and Tuesday’s +$0.99),
- Ionis Pharmaceuticals (IONS +$0.46),
- Prime Medicine (+$0.41),
- Intellia Therapeutics (NTLA +$0.33 after Thursday’s -$2.27, Wednesday’s -$1.50, Tuesday’s -$0.01 and Monday’s +$2.10),
- Editas Medicine (EDIT +$0.26 after Thursday’s -$0.07),
- Beam Therapeutics (BEAM +$0.23 after Thursday’s -$2.57, Wednesday’s -$0.86, Tuesday’s +$1.44 and Monday’s +$5.18),
- Regenxbio (RGNX +$0.19 after Thursday’s -$0.74, Wednesday’s +$0.22, Tuesday’s +$0.82 and Monday’s +$0.97),
- Sangamo Therapeutics (SGMO +$0.14),
Q4 – December
- Friday closed negative with 16 incliner, 19 decliners and 0 flats
- Thursday closed negative with 6 incliner, 28 decliners and 1 flat
- Wednesday closed negative with 12 incliner, 23 decliners and 0 flat
- Tuesday closed positive with 26 incliner, 8 decliners and 1 flat
- Monday closed positive with 30 incliner, 3 decliners and 2 flats
The BOTTOM LINE: I try to keep it simple … and short!
As Friday’s session evolve from an utter slide to a marginal downside as options were covered on an expiration Friday.
What can I say, NOT much and NOTHING new … market volume increases during major expiration days which moved an already anxiety driven market in a down sliding direction.
“As I stated yesterday and again this a.m., “be prepared for downdrafts and it came TRUE!”
This market and sector aren't giving any reason to add exposure as the major indexes can't hold a gain. If you're buying on weakness, you might be jumping onto a sinking ship.
Be prepared … just 10 trading days remain in 2022.
Yet again, many stocks have experienced downside progression - today as I believe, “uncle” algorithms filleted the oversold to continue the down slide.
Avrobio (AVRO closed down again -$0.0291 after Thursday’s -$0.0028, Wednesday’s -$0.0049, Tuesday’s +$0.01 and Monday’s flat $0.00 (says a lot of addressing the delisting issue) having filed a S-3 for $250 million common stock, preferred stock, debt securities, warrants and unit offering within draft prospectus by Cowen as stock sinks while delisting continues? Just another “screw-job” of investors! < Read, SELL and Weep - see hyperlink below> Avrobio (AVRO) files S-3 (Registration Statement) for offering with draft prospectus by Cowen … https://investors.avrobio.com/node/9116/html
· Also, RA Capital has sold its position in the company – a sign of dissatisfaction!
· While, President, CEO and director Geoff Mackay carries home a HUGE salary of $754.39 K per year?
Biostage (OTCQB: BSTG) closed down -$0.80 to $5.85 with 8,115 shares trade after Thursday’s $0.00 with only 100 shares traded after Wednesday’s $0.00 with1,100 shares traded following Tuesday’s $6.90 with NO shares traded after Monday’s $6.90 with 400 shares traded – I would be surprised to wonder IF DST Capital was selling to recoup some cash after a warrant conversion??
As I continually question, “The real question that should be asked is how many companies are at the end of sentiments … leash?
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.
Regulation Analyst Certification (Reg AC): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.