Life is full of choices and oftentimes there is no good choice. Kind of like the Presidential election in the United States right now if you restrict your choices to Donald or Hillary, most U.S. voters are trying to decide between two types of poison in my opinion.
But wait, this isn't a blog about politics.
Sometimes problems are good, like trying to decide whether or not to take profits on a stock that has made big gains in a short period of time. That's a problem being presented to Resverlogix shareholders right now, and I'm not going to suggest anything. I will however invoke my favourite little bromide which I repeat over and over here at Avoid The Bag.
Nobody has ever gone broke by taking profits.
But that doesn't mean taking profits is easy..it can be very hard, I just wrote about it this past Sunday: Sunday thoughts on when to sell. The difficulty comes from fear over selling too soon. Nobody wants to sell something for $2 and then look back in a few days or weeks and see it at $5, $10 or $20. That might sound insane, but in the biotech space things can and do happen very quickly, both good and bad.
Pharma watchers probably already know about Tobira (TBRA) which shot up from less that $5 to around $40 on M&A news that came out September 20th. On the flip side Novavax (NVAX) recently went from over $8 to less than $2 after reporting missed endpoints in a phase III trial. Big risks and big rewards, if you're familiar with the biotech space then this is old news.
Resverlogix hasn't achieved anything like the gains experienced by TBRA, not yet anyway. But still the chart is eye popping.
From the $1.20 to $1.30 area when I first started writing about RVX here at ATB, to a close of $2.02 today (Wednesday Sept. 20th). The question is...what is driving the sudden surge in volume and price? And the simple answer is, I have no idea. What I do know is that buyers have been storming in and that the price has exploded higher.
Volume
Wednesday's Canadian volume of just over 400,000 might seem light, however it represents the largest single day of trading in the past 12 months. On the US side under the symbol RVXCF there was less than 90,000 trading. Again, not a lot...but exponentially higher than the average daily volume of the past three months which is just 5,084 shares.
Trading is still light, but exponentially higher than what we've been seeing of late. In fact during this month of September RVX had two days at the start of the month with less than 5,000 shares trading hands. Strange to think that 400,000 shares trading is huge, but compared to recent norms it is.
News
The company has issued news twice so far in September. The first was on September 12th announcing participation is some upcoming conferences, and the second came out September 14th notifying the firm's most recent quarterly filing. Prior to those PRs the biggest news item was probably the one from August 11th when they announced a positive recommendation from the Data Safety Monitoring Board for the ongoing phase III BETonMACE trial.
Whatever is driving RVX's recent move, I don't believe its news. Resverlogix is very active in participating in scientific conferences and investor presentation shows like Rodman & Renshaw, and there were no surprise announcements that came out recently as far as I'm aware. The CEO did mention that a second licensing/partnership deal will be announced soon during his recent R&R presentation, but that "news" was already out there.
Promotion
Zacks SCR put out an updated report on Resverlogix on September 19th, however it seems to be pretty much the same as the last one. Zacks and other "analysts" shops of this type are what they are. Small cap companies like Resverlogix engage firms like this to provide shareholders and prospective investors with something to review when researching a company. I don't like it but its part and parcel of the industry.
Bottom Line Opinion
Getting straight down to brass tacks, I have always seen the potential for Resverlogix to attain a valuation in the billions of dollars. If Apabetalone is successful in treating all the indications the company is targeting I wouldn't even hazard a guess as I think even $10 billion could prove conservative. Call that pumping if you wish, but it is a genuine opinion, and it is predicated entirely on Apabetalone succeeding in clinical trials like the on-going phase III BETonMACE trial for patients with Diabetes Mellitus.
The reason I think the valuation is as low as it has been, and still is currently is because I do not believe that I am alone in having this opinion. Both of my regular readers know my views on Pump and Dumps. Pumps happen all the time, you see share prices explode higher, volumes go insane...millions and millions of shares trading every day as the smart money players unload on excited retail investors.
I think the opposite has been happening here, I think there are smart money players who have been accumulating RVX for the past 2 to 3 years. Yes there are over 100 million shares issued and outstanding but roughly half of those are already in the hands of major shareholders like billionaire Kenneth Dart via his investment arm Eastern Capital. That only leaves 50 odd million left, and I'm certain that I am not the only bleacher bum retail player who has bought in here.
The reason I think RVX has been drifting for so long.....is because that's the game. Retail investors are often loathe to part with their shares when a stock is climbing higher and higher. There are tools available to the big operators and the biggest tool in their box is short selling. If you're sufficiently intrigued by this line of reasoning I will invite you to read this Business Insider article on exactly what I'm talking about. And I think that the bigger the potential rewards, the longer accumulation can take.
Bottom Bottom Line
The reason I think RVX's price has been moving as it has since about Sept 9th, I think its because something is close....very close. In my opinion something is coming down soon and there's no more time to play games, the real players who move the market are getting ready to send RVX higher I believe, much higher.
What exactly? I do not know...a nod from the FDA, a partnership or buyout, a blockbuster regional licensing deal? Again, I don't know...but the trading of late suggest to me something is in the works.
Of course, again, its just an opinion and it could be wrong.
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