Why did Univ of Texas Investment Management Co sell out of Ziopharm?

*Full disclosure, I own ZIOP put contracts so my opinions and views are not without bias.

Was UTIMCO "mandated" to sell its holdings in Ziopharm?  Or was that just something a stock promoter made up?

Marketing is an interesting thing, sometimes it borders on propaganda.  Repeat something often enough, and many people come to accept it as fact, even if there are no facts to back it up.

Companies and their advertisers repeat a line over and over until it becomes embedded in the collective conciousness.  If I say "Maxwell House", the first words that will spring into the minds of many people will be "good to the last drop".  Hear the words "Fox News" and the statement "fair and balanced" will likely be associated, even by those who believe Fox News to by anything but.

Its not just in business either, branding statements are all over politics as well.  The city of Toronto had a famous and infamous mayor, who maintained much of his popularity even after numerous scandals and drug use because of the oft repeated line that he "saved Toronto taxpayers $1 billion dollars".  It wasn't true, but it was repeated so often that....in the minds of a good many people, it was.

Which brings me to Ziopharm and the Univ of Texas Investment Management Co or UTIMCO for short.

As most people reading this will be aware Ziopharm and Interexon entered entered into a licensing agreement with the University of Texas MD Anderson Cancer Center.  As part of this agreement Ziopharm issued 11,722,163 common shares to the Board of Regents of the University of Texas System.

http://www.sec.gov/Archives/edgar/data/1019231/000101923115000008/sec13gziopharm.htm

Those shares have since been sold.  But why were they sold?

There's a Seeking Alpha blogger with the username Options2Wealth with over 700 followers on that site who's blogged frequently about ZIOP.  Back on November 29th 2015 he put up a posting: "ZIOP You Ain't Seen Nothin' Yet!". That was back when Ziopharm was trading over $13 per share.  He was predicting big things, to the moon....all the usual stuff.

Then in December 2015 the bottom fell out as the share price cratered all the way to about $5 by the end of January. 

Part of the reason for that drop may have been that the University of Texas reported selling off a large number of their shares, and they've since sold off what was remaining.  The question was (and is) why?

Seeking Alpha To The Rescue

Options2Wealth then wrote another blog posting entitled "Oh, What  A Whupping!" published February 21, 2016.

In this posting the writer explains why he'd been so wrong about the predictions he'd previously made.  And he wrote that the University of Texas' charter "mandated" that UTIMCO had to sell any unrestricted securities, and not to be worried about it because they had no choice basically:

• ZIOP shares that MD Anderson received as part of the landmark agreement it signed with ZIOPHARM and Intrexon in January 2015, were all sold off by the Committee tasked with managing MD Anderson's investments...(Not because the Committee lost faith in ZIOP's technology and decided to bail, but it disposed off those shares because its charter so mandates...) - *Bolding is mine.

And that's all well and good.  But is it true?  Or is it like former Toronto Mayor Rob Ford's claims that he never used drugs?

If you check that blog posting on this supposed "mandate" you will see that I asked for the author to provide a link to that information, but I did not get a reply.  Just another poster saying:

• If the endowment funds receive unrestricted securities, UTIMCO will follow a liquidation plan to convert the securities to cash (see Plan below). When the Funds receive distributed securities, Securities Operations notifies the liquidating investment manager and indicates any restriction on the sale of those securities. If the endowment funds receive restricted securities that cannot be immediately sold, the securities are held until they become unrestricted and then are liquidated based on the liquidation plan for distributed securities."

I replied again asking for a link, but again there was never any reply to my request.  I've done numerous searches of the verbiage in that reply looking for a verifiable source, but have so come up totally empty.  All I find is that its been cut and pasted into investor forums all over the place.

The share price then recovered, getting up close to $10 by the beginning of March 2016.  Did this widely disseminated "information" (sic) about UTIMCO being "forced" to sell help shore up investor confidence?

I have conducted my own research on the matter and have found nothing about UTIMCO being mandated to sell unrestricted securities, like those paid to them by Ziopharm

Is there a mandate or not?  I'm guessing that a lot of ZIOP shareholders are under the impression that there is.  Ziopharm has quite the footprint in social media.  At InvestorVillage the ZIOP thread is pretty much always the most active board.  On stocktwits the ZIOP stream has over 4,000 IDs watching it.  And on Yahoo's board for ZIOP, this story that UTIMCO had no choice but to sell is accepted as fact, just as it is on all the other social media sites I've looked into.

Just like with Maxwell House and Fox News....I bet if you asked most ZIOP shareholders why UTIMCO sold they'd answer:  "Oh, they had to sell...its part of their mandate", based on what they've seen on social media.

My own research on the matter led me to this:

https://www.utimco.org/scripts/internet/fundsdetail.asp?fnd=4

And to this:

• Equity outperforms fixed income over the long term, therefore we have an “equity orientation”, while recognizing that during certain periods fixed income can present attractive risk-adjusted returns; ( https://www.utimco.org/funds/allfunds/2015annual/pdfs/2015_UTIMCO_Annual_Report%20-%20Printable%20-%20Low-Res.pdf )

I find it hard to reconcile an organization with an "equity orientation" divesting equities unless it had reason to believe that it was a good time to sell, not because of some "mandate", that I'm unable to find information on anywhere except via second hand sources on social media sites with no attribution and links.

Now....could I be wrong?  Absolutely, if someone could provide a link to information about this charter that mandates stocks like ZIOP must be disposed of, then I will be happy to acknowledge having been mistaken.