Its something you see all the time in professional sports, a player with a successful history hits the free agent market and gets a huge contract. Teams sometimes overpay, and then get stuck with a grossly overpaid player who isn't performing. Its a lousy situation but it happens, and the team that overpays is stuck, often unable to trade the player unless they're practically willing to give him away and pay a portion of his salary.
It happens in the stock market too. Many Ziopharm investors were thrilled with the involvement of renowned biotech Guru RJ Kirk. Here was a guy who had orchestrated some blockbuster deals with companies like Scios and New River. Kirk was a big home run hitter in other words, and when Ziopharm announced it was partnering with the MD Anderson Cancer Centre the bidding on shares of ZIOP went through the roof.
After trading down around $2 in 2014, the PPS climbed up near $15 in 2015 with the Anderson deal providing the wind in the sails. Now of course ZIOP is down to somewhere around $6 to $7 and running out of cash with the prospect of more dilution within the next 12 months.
RJ Kirk is also the Senior Marketing Director and CEO of Third Security, an investment firm he started in 1999. In viewing the biotech and science centred holdings of Third Security its apparent Ziopharm isn't the only one that has not been performing as well as investors were probably hoping.
- XON up near $70 in 2015, now its trading under $30
- HALO up around $25 in 2015 now under $12
- FCSC over $7 last year now less than $1
- SYN briefly over $4 in 2015 now less than $1
- OGEN same as SYN
- HSGX started 2015 around $12 and is now under $2
- TBIO got up to $3 and even $4 in 2015, now around 20 odd pennies.
That's just a sampling of course. It perhaps goes to show the wisdom of that oft repeated bromide about past performance being no guarantee of future success. Its not just in pro sports that players lose their touch.
But in fairness just because a number of stocks have under performed in 2016, that doesn't mean they can't turn it around in 2017 and beyond, in fact I'd expect at least one or two of those beaten down stocks listed above to rebound.
Who knows, Ziopharm could be one of them. In my opinion a lot will depend on their ability to raise money yet again, and if it involves diluting current shareholders, then to what degree.
Good luck
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