Intra-Cellular Therapies (“ITCI”) Stock Soars While Key Clinical Data Not Presented to Shareholders Looks Highly Disappointing

(July 15th, 2015) Biotech stocks have been on fire. And for good reason as numerous life-saving discoveries have come out of small, previously-unknown firms, making their owners rich many times over. But beneath the surface, a number of troubling drug development companies have caught the attention of investors with clinical data that’s dubious at best. With seemingly endless amounts of optimism, these biotech stocks have ridden the wave of investor enthusiam even when the data doesn’t look as promising as the market caps seem to indicate.

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All You Ever Wanted to Know About Retrophin But Were Afraid to Ask

(June 2nd, 2014) Humans, like atoms, abhor unsteady states of existence. Just like electron transport gravitates towards a steady-state, people gravitate towards peaceful lands and away from battleground areas. Read more

Know What to Buy When Putin Comes Knocking

So Putin rolls a bunch of tanks up to the Ukrainian border and the market slides a percent or so. In any other market that would be considered a yawn. But here in the good ‘ol US of A, where the average active investor can barely remember the dog days of ’08, few traders seem to have the skill set necessary to maneuver in a down market. Having done this for 20+ years, I thought it would be helpful to share my trading tips for when war comes knocking.
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QuickNote 7/25/13 – Angie’s List

By now most of you have read about Angie’s List (Nasdaq: ANGI) second quarter earnings. In a nutshell, they were terrible. I just wanted to add a quick thought to the commentary out there.

I thought the best take on ANGI was Mintzmyer’s piece entitled Angie’s List Underwater And Deteriorating Further. Specifically, the note about ANGI spending $132.62 per ‘net new member,’ -which is the highest amount in 9 quarters. Of course, ANGI made no mention of that metric in their press release, as they have kept the quarterly churn #’s private. However, a simple analysis of the first & second quarter #s gets an approximate churn of 137,000 members leaving the service over 90 days.

Put another way, every day more than 1,500 members leave Angie’s List.

The true profitability of the overall business must take into account this deteriorating number otherwise your business becomes a run-off enterprise. Think of an oil producer – without drilling new wells the overall revenues will over time decay to nothing.

Similarly, ANGI needs to attract 137,000 new members every quarter (based upon the Q2 churn) just to stay even with its subscriber base.

ANGI spent $28m in the quarter attracting a total of 347,000 “gross subscribers added” (no word on how many of those new adds were freebies or low-cost areas such as Little Rock, AK where the going rate is $20/year. At that rate it would take 6 years to recoup the marketing spent bringing in that customer!)

Another way to look at it is that ANGI spent $11 million in marketing (137k divided by 347k) just to stand still, and an additional $17m was ‘invested’ into growing the business. (Again, this is all assuming the quality of lost ANGI customers equates to those gained; unfortunately given the amount of information released by the company there’s just no way to know)

Assume for argument’s sake ANGI would stop attempting to grow its’ subscriber base, and return those marketing dollars back to shareholders – the company’s operational loss would have switched over from -$14.3m to a measly $2.7m gain. Annualized that’s less than $10 million.

In other words, the idea that ANGI is artificially generating losses to grow it’s business covers up a very important fact – namely that what it’s built to date isn’t that profitable after all.

At the time of this report, the author was short ANGI common stock and long ANGI put options


” Concentration is my motto – first honesty, then industry, then concentration. ” Andrew Carnegie