Cute Tricks and Benchmark for Stock PriceYesterday, at 3:59, ONCY was trading at $3.40, no change, volume 64,765, with a 200 share bid of $3.39, and a ceiling ask of 3100 shares at $3.40. The last trade for the day involved 320 shares with ONCY closing down 5 cents at its low of $3.35. What does this trade do to your impression of ONCY?
On the TSX, ONC was down 2 cents for currency rate adjustment at $3.51 at 3:59. The volume was 59,298 shares with a bid 1600 shares at $3.51 and an ask of 6000 shares at $3.55, where it closed.
This is one example of one of the tricks the pros use to manage the stock price down. Their best trick is patience. Wait until a retail investor wants to sell. The accepted market price has been less than $3.00 for a long time so $3.35 looks good. The pros biggest advantage is the lack of comparables to judge the stock price. Oncolytics was an investment of faith that one day Reolysin would be a success. How do you put a market value on faith? A blue chip international company is a more complex organization than Oncolytics to value but there are many accepted benchmarks statistics to evaluate the stock price and direction like P/E ratio, sales stats, revenue growth, etc.
When it comes to Oncolytics, a benchmark has arrived with the pivotal trial. It is its market valuation. The number of shares that you own represents your share of the value of the success Reolysin. At $3, the market valuation is under $200 million which is unrealistic. The intellectual property rights, from concept to manufacturing, for a major advance in the fight against cancer exceed 1 billion dollars using a simple smell test. By waiting 2 years, you have over an 80% probability to share in market valuation pot exceeding 1 billion. It could exceed $5 billion. Your share price can move from $3 to $15 to $75!
The biggest problem that institutional investors have is that you, retail investors, own the shares that they want. If you do not sell them, they can not buy them. They have the urgency to buy. What is your urgency to sell? You had the good judgement to buy Oncolytics in its early stages. You deserve to enjoy a big slice of the pie. Institutional investors are Johnnie come late opportunists with skills to manage their going in costs.
Before you sell, consider the associated market valuation. Are you getting a fair slice of pie? If not, hold or buy. The reduced trading volumes are hurting the manipulators. They can not force you to sell. They can entice you to sell by raising the stock price to support a realistic market cap valuation above $500 million.