Thursday, June 19, 2008

Are You Sirius? Manipulation. SIRI/XMSR

On Monday, Chairman Martin of the FCC endorsed the Sirius/XM merger, sending the stock price up, but not by much.

The stock then traded down over the next couple of days, low-lighted on Thursday when a Goldman Sachs analyst lowered his price targets for both companies.

Ironically enough, the reasons that the analyst gave for lowering his price targets are the same reasons that Sirius and XM are using to argue their case that they are not creating a monopoly by merging; competition with MP3 players, iPods and other electronic devices.

One thing I’ve learned over the course of my investing hobby is not to trust these analysts. Their job isn’t to help out the little guy, it’s to help out the big boys. Way more often than not, I’ve bought when the analysts were negative on a stock and then made out pretty good later on down the road when analysts finally upgraded, but by then it was too late to get in cheap for all of those that sold or stayed away because the analyst was negative. And you know these guys are buying when they go negative, they shake out the weak, scare away the little people, and load up on their shares before they then upgrade and make a nice profit off their previous downgrade.

Manipulation, if not pure crookedness.

You know Goldman’s is buying today with the SIRI stock trading down around two bucks, just like everyone else with spare cash who’s been watching this stock awaiting news on the merger, and they may have downgraded the stock so they or their hedge-fund buddies could cover a huge short position. Of course, this is all just VFC’s humble opinion.

One thing I am very confident on, is buying at these prices will ensure VFC nice gains in the future, whether it be the very near future with a positive decision on the merger, or in the longer-term future where real growth from SatRad occurs, whether it be by subscriber growth, advertising growth or cutting costs.

In all actuality, nothing changes right now, except that we have a great buying opportunity and thanks can go out to Goldman Sachs for that, but that great buying opportunity comes, once again, at the hands of some shady business.

Every day that goes by, and a whole lotta them have gone by since the merger was announced, is a day closer to the FCC’s decision on whether or not to approve the merger. Today’s downgrade doesn’t have any influence on that decision.

VFC likes doing things opposite of what the analysts recommend, there’s more money to be made that way. By the time Goldmans upgrades SIRI or XMSR again it’ll be trading double or triple where it’s at now.

It’s a shady business, this stock market.

Monday, June 16, 2008

Dendreon’s Shelf Offering, DNDN

Interim results from Dendreon’s ongoing Phase III trial for Provenge, a prostate cancer immunotherapy, are due out in second half of 2008. Conceivably, news could hit the wires as soon as two weeks from now, since the second half begins on 1 July. It’s not VFC’s opinion that we’ll see results so soon, but what do I know. I look more towards September for results, but again, I really have no idea. I’m just a little guy investor who’s pretty well positioned with Jan 2009 options of DNDN if the results are positive. If they are not positive I’ll add to my position of DNDN shares on the drop, because I do feel that Provenge will be approved sooner or later, whether it be here under the scrutiny of the ‘heavily influenced by big Pharma’ FDA or oversees in Europe and even Russia, who recently granted approval for Oncophage, Antigenics(AGEN) kidney cancer immunotherapy.

More important than VFC’s, or anyone’s, stock position in Dendreon, is the benefit that this drug will have to the thousands of advanced prostate cancer patients who have little alternative than the awful side effects of chemo. It’s easy to get caught up in the ins-and-outs of the stock market, where we wait for the next big spike on which to sell, but too many have forgotten that the drugs which we invest in, provide hope of a longer, better life for the patients that may need them. With the financial windfall a drug’s approval or disapproval (based on long or short positions) will bring onto an investor, it’s hard to imagine that some people positioned in high levels are not influenced by money, rather than a drug’s actual life-saving ability.

Possibly included in this category are the the conflicts of interest found last year with two doctors who fought against Provenge’s approval after the positive advisory committee vote. These doctors were found to have financial interests in companies or hedge funds with competing interests to Dendreon’s Provenge, yet their opinions seemed to heavily influence the final decision to not approve Provenge..

Many times over we’ve discussed the Dendreon story here at VFC’s Stockhouse. Most recently Dendreon announced a shelf offering of $300million dollars, meaning that the company may raise funds of up to $300 million dollars in terms and conditions to be decided at the time of the sale. In the filing, the company claims that it intends to use these funds to pay for marketing costs associated with the sale and marketing of Provenge.

In all instances, I’d hope that this is a positive move, but it’s not so easy to count on that. The company is in a great position to raise cash in the event of positive or negative interim results. Nothing really changes with the waiting game.

During that waiting game, the only real news that can influence the stock price to the positive would be partnership news. Dendreon, to date, has had no interest in a domestic partner, but an oversees partner may be waiting in the wings, perhaps waiting for interim or final results before inking the deal.

If Provenge interim data fails to get the FDA to act, then Dendreon may look overseas, as Antigenics (AGEN) did with Oncophage. That would make the waiting game a little bit longer, but VFC believes eventually Provenge will produce results for patient and investor alike. And both patient and investor hope that day comes sooner rather than later.

But for now, all we can do is wait.

Wednesday, June 11, 2008

When Will the Sirius-XM Soap Opera End?

Day after day the various message Sirius (SIRI) and XM (XMSR) message boards are active with theories and predictions of when the proposed merger of these two satellite radio companies will take place and what restrictions will be put on them by the FCC.

The Department of Justice approved the merger months ago.

The merger was marked by controversy from the get-go. When the two companies received their respective licenses it was with the agreement that the two companies would not merge, but as time and technology progressed, SatRad found itself competing against iPods, cell phones and MP3 players.

That competition, along with the fact that both companies went into free-spending mode that spiraled them into an almost bottomless pit of debt, set the companies on a course for merger or bankruptcy, and the companies chose merger, although Sirius looks to be the one to survive if the merger is not approved.

Initially XM had the head start in subscriptions, but Sirius has quickly been gaining share on XM since they signed Howard Stern to the ridiculous five year, 500 million dollar contract.

Now, well over a year since the merger was announced, we still wait on word from the seemingly inept FCC. The lobbyists have worked overtime on both sides of the merger, with the National Association of Broadcasters leading the opposition. Their arguments against the merger are somewhat hypocritical and loaded with conflicts of interest, as is the involvement of various Senators and Congressmen in the decision process. Conflict of interest is plastered all over Washington, but this is getting ridiculous.

One way or another, something has to give. I think everyone is tired of reading the predictions from anyone with a website or a blog on the internet, and the Morningstar SIRI and XM pages are flooded with article after article that all say the same thing; which is pretty much nothing.

Jim Cramer recently threatened to shut his mouth if a decision wasn’t reached soon, and maybe that is why we’re all waiting now.

VFC is loaded up on Jan 09 options for SIRI, so the crunch time isn’t on yet. I did purchase some June four and five dollar calls recently just in case, but not enough to really make a difference.

The fact is, this is getting ridiculous and it just feeds the thought that people in government buildings really don’t accomplish much with the taxpayer dollar. As long as their pockets are getting lined by the lobbyists, they do pretty good for themselves.

One would hope there is a good reason for the holdup, but I doubt it. 

Everyone will just have to hurry up and wait for the outcome of the SIRI-XMSR soap opera.

Friday, June 6, 2008

Celsius Continues to Grow, CSUH.OB

Celsius Holdings signed another couple of distribution contracts over the course of the last two weeks, with B&B Beer Distributing in Michigan and Refreshment Services, Inc, which covers four states in the Mid-West.

While Celsius slowly grows its distribution, the company’s stock continues to trade between .08 and .09 cents and VFC couldn’t resist the temptation to make another share purchase at .08 cents last week to lower my cost average for CSUH.OB.

Some pretty big names, such as Walgreen’s, CVS and the Vitamin Shoppe all carry the Celsius beverage, and every couple of weeks the company announces a deal that increases both the distribution network and the Celsius brand awareness.

We’re still waiting on news from Jorge Hane and an update on the status of the new product that Celsius, Inc. previously stated they would release this year. An update on either one of these items could provide some valuable insight to the future bottom line of the company.

That news and the international growth should provide us with some pretty good 2nd and 3rd quarter numbers, hopefully enough to boost the share price and start us on an uptrend.

In the meantime, the longer the share price remains at .08 cents, the more VFC will load up at that cheap price, as long as we keep seeing the growth in distribution that we’ve seen this year.

With insiders and distributors both heavily invested in the company, I’m confident that a strong business will be grown in Celsius Holdings, and it’s only a matter of time before the investors start to reap the benefits.

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