64 Reasons for the Correction RallyOn Sept 16, I posted my 64th contribution to the Discussion Board. It marked a significant change in my strategy as a pumper. It covered everything that I wanted to say.
The entire discussion group was the target audience for my first 63 posts. My objective was to break the back of a coordinated manipulation of Oncolytics’ stock price around or below the margin break point of $3.00. The market is saying that the manipulation is over and the stock is heading to a market capital valuation above $500 million, over $7 per share.
My target audience has changed to new comers looking for reasons to buy or sell Oncolytics. They will probably only read the first few posts. I do not want my 64th post to become buried on page 2 or 3. I will keep my 64th post alive by cutting and pasting to the end of my future contributions. Future contributions will be timed to support the correction rally and contain a brief discussion for frequent readers.
For new comers here is my 64th post.
Post 64 Welcome to New Comers and returning Friends September 16
Welcome to new comers to the Discussion Board. Welcome to old friends who have not checked in on us for awhile. It is easy to guess why you are here. You are searching for answers as to why this sleepy little stock, Oncolytics, is surging on the NASDAQ and TSX. What is causing this rally? Should I buy in? Should I sell out?
Frequent readers do not need to continue reading; I am not saying anything new.
Let me introduce myself, I am JLGemini. I stumbled onto this Discussion Board last May. I was looking for reasons why the fifth rally of ONC in 2010 had stalled and ONC was trading below the $3 Canadian margin requirement level. I was greeted by a group of gripers complaining about the Company. I did not think that their moaning and groaning could influence the stock price. I did think that their whining was not helping the stock price. On May 21, I posted my first blog, Naysayers. ONC closed at $2.85.
Naysayers caused a stir amongst the gripers. Our discussion during May caused me to consider that they had alternative motives. If I was as negative as they were, I would have been long gone from the stock. I had observed strange trading practises of selling large blocks into the market to kill rallies and spike the stock below $3.00. Maybe this group of gripers were pumping the Discussion Board to encourage selling from retail investors.
It sounds crazy. What was crazier was a Company on the doorstep to a major advance in the fight against cancer, possibly a cure, had a market capitalization of less than $200 million. I had to make a choice. Be considered sane or advance a conspiracy theory on a Discussion Board. My family is glad that I use that alias JLGemini. I have made many outlandish posts. I am kidded at the dinner table a lot but ONC closed yesterday up 24 cents at $3.91. The volume on ONCY was heavier with 266,484 shares traded and closed at $3.80.
This is my 64 post. I, now, believe that this Board influences the market. Over the course of the 63 posts and over 19,600 hits, I have moved attention to a market manipulation and found a way to break it. I encourage existing shareholders not to sell. The current market cap should exceed $500 million which requires a share price above $7.00. The potential for the drug Reolysin and the intellectual property rights granted to Oncolytics in patents from conception through manufacturing place the ultimate market cap valuation in the billions.
For existing shareholders who are wondering whether to sell my advice is to hold. Take the time to browse through the history of the Board. You will see that I have detractors and supporters.
For new investors, most existing shareholders will appreciate your investment pushing up the stock price. The rally correction may quickly move the stock price above $7.00. To shorten your due diligence visit, I have copied below a trilogy of my recent posts. The first is a fictional conference call explaining the manipulation. The second is the sequel explaining why the wheels of the manipulation are falling off. (It has received an unusual high number of hits compared to my other posts.) The third was my speculation on the future. Also check out some recent posts to see attempts to side swipe the rally. They are being countered by other investors who support me.
Enjoy your visit to the Discussion Board.
JL Gemini
1. Kill the Rally Conference Call Posted August 14
For your entertainment, I have edited the following fictional conference call between the manipulators that I taped last night. The manipulators have only been identified as M1, M2, M3, etc to conceal their identity. M1 is the lead manipulator and organized the call. M1 is from Big Pharma. The others Ms are institutional investors who manage mutual funds, pension funds, and hedge funds.
M1: “Welcome all, that &#%% Gemini upset the apple cart last Friday by pointing out that the current stock price does not support a realistic market valuation for Oncolytics. If this rally continues and drives the stock to a realistic level, it will ruin our plan. How do we kill the rally, gentlemen and lady?”
M3: “What does Gemini hope to achieve? At the $3 level, he had the opportunity to buy the stock on the cheap?”
M8: “Don’t be naïve M3, he is a retail investor. He needs margin to buy more stock. He has spent his bullet on ONC. I bet we burnt him five times this year as we drove minor rallies back below $3 and trapped him in a margin call.”
M5: “Serves him right. You would think getting burnt and losing money would teach him a lesson.”
Laughter all around
M3: “He says his objective is to defend his investment and is telling retail investors that they are being scammed by selling at an unrealistic valuation.”
M5: “Bull, he’s a pumper. We have dealt with them in the past. The problem that we have this time is that he has linked the stock price to the market cap valuation. All we have to do to kill the rally is execute our standard moves to manage the stock price. Retail investors are dumb chumps. We will need to post blogs to websites. We need to distract them away from Gemini’s rants. Let him rant about market cap. We have been on the Board longer and retail investors know us. We can talk about other things.”
M8: “M5, do you really that we can push the stock price below $3 by only using the Discussion Board? I think that we have to do more than post. We need to sell stock into the market to stall the rally. We can continue to put up larger blocks on the ask side to create the impression that people want out at this high rally price. Obviously, we will need to stop buying so the bid side is weak. Alternatively, we can start selling blocks between our funds to create the impression that institutional investors think the current price is justified.”
M1: “I like it. M8 and others, do you think that we can move the stock price back to under $3.00?”
M8: “I think that it will be easy to stall the rally. Oncolytics is a small obscure Canadian company. The retail investors who know about it are mostly in it or have been discouraged to sell out. The unknown is the retail investors’ appetite to buy on margin. The volume of margin buying could surprise us. Once the rally is stalled, we can try to push back to $3.00. At worst, we concede Gemini some ground and coordinate our trading to maintain a price above $3.00.”
M3: “I am not comfortable at managing the price to a fixed point above $3.00. I do not want to be caught in a plan where there is obvious collusion.”
M1: “Grow up M3. We all know the chances of getting caught are next to nothing. Regulatory protection for the retail investor is zilch. We need you to be a team player.”
M3: “OK.”
M1: “I want every one to be aware and willing to move quickly in the event that we can not stop this rally. Gemini has set some investor’s sights at a market cap above $1 billion. I was planning on acquiring Oncolytics for less than a half that with your help. Based on our combined holdings, it would have taken only a few retail investors to approve a takeover at $6.00 a share. If the rally is not stopped and the stock price continues to gain momentum, I may be forced to launch a takeover bid.”
M8: “A premature takeover bid may be a good thing for me. My fund performance this year reflects the economy, awful. It could use a pop from the takeover premium and I also hold a large position in Big Pharma which will also gain on the transaction. Being a first quartile performer will be a feather in my cap during these tough times.”
Laughter all around.
M1: “You are also not forgetting the special consideration that I will pay into your secret account for your efforts that I so greatly appreciate.”
Lots more laughter as good byes are said.
Possible or pure fiction?
2. Conference Call – Closing Points Posted August 15
A happy ending to yesterday’s conference call story would have Dudley Do-Right bursting onto the scene at the end to save pure maiden Oncolytics from the evil M1. I did not write Dudley into the script so as not to detract attention from key points. To Sharkfood’s annoyance, I will recap them before going on with why M1 is so scared of the current rally. The wheels of the manipulation are falling off.
Recap of the reasons that the wheels are falling off from the call:
1. M1’s scam is fully understood by the Board and the long term risk of an undervalued takeover is identified.
2. The Board is aware of both pumpers and gripers. In the past, gripers got a free ride.
3. Managing the stock price to the margin level is legal and supported by institutional investors. They have positive cash flow to invest and have the business savvy to acquire shares at a rate to reflect the stock’s trading liquidity.
4. Managing the stock price above the margin level requires collusion which requires crossing the line. You do not need to have the smartest sheriff in town to investigate a blatant takeover and identify the usual suspects.
5. The importance of margin buying for retail investors is identified.
6. My harping to retail investors to hold and not sell is seen as a problem to the manipulators.
7. The link between the current stock price and the current joke of a market cap valuation is repeated.
8. The counter ploy of the manipulators is to ignore/discredit Geminin, and bring up other subjects. Dampen the rally by selling.
9. M1 was concerned about the current stock price and wanted it pushed back.
Let me pick up on the last point and comment on M8’s reply. M8 said stalling the rally is not a problem and pushing back the price is possible.
The current rally is a threat to M1 because of the risk of loosing control. Loosing control is defined as the stock price spiking upwards. A $1/2 billion market cap is reasonable and requires a stock price above $7. A spike to $7 can transform Oncolytics from an ugly duckling to market darling. The stock could soar above $10 and still be viewed as a fair price. My definition of a fair price is when I am indifferent as whether to buy or sell. I will be buying up to $10 without loosing sleep.
The stock price will move based on the demand to supply equation. Holding cuts supply and there is no reason to consider selling until the correction is fully reflected. Demand is building. With the price above $3.50, there is a cushion to buy on margin. Some readers will take advantage of margin and have the leverage room to push the stock price up.
More momentum will come from new retail investors, the opportunists. I imagine that that many opportunists have stock filters to monitor situations of increasing volume with increasing price to participate in a short term feeding frenzies. In the past, they would read about doom and gloom, and general griping on the Board. More important was the stock price did not support margin buying. The world today has Oncolytics set up for a feeding frenzy.
A spike in the stock price will cause institutional investors to change their strategy. They can not afford to wait. It is becomes a race to be early in to pick up the easy money. They will buy in big blocks.
Sum the impact of margin buying as a stimulus and you realize why M1’s pants can be wet.
As for attempts to counter the rally, the manipulators tried yesterday. It was a perfect day for them and not an accident. Doug Ball was presenting in NY at the Rodman Investor’s Conference. As I identified in my earlier post, their counter fell short. The market did not follow their early morning lead and they fired their second shot at the close. Investors are not being deceived. This mornings’ early activity indicates that the manipulators are having problems reversing the rally. Sharkfood’s posts are not worth a reply from me. You can guess my opinion.
Let the rally continue! The stock price has to move to support a realistic valuation. Don’t sell. Enjoy the ride.
3. Reply to Boardwalk97 – Who? Posted August 15
Boardwalk, you are asking me to speculate in an industry that I do not know. There are experts in the audience who can give you a better guess.
I take Brad at his word that Oncolytics is talking to many people. I look at their Board of Directors. I see members with backgrounds with strong industry ties. I am a long term investor and have read every one of Oncolytics' press releases. In the early days, they signed a deal with Pfizer allowing them to investigate Reolysin for veterinarian use. I was pleased to read that Oncolytics terminated the arrangement after a short period. This is the background to say if Oncolytics goes on the auction block; it will create a bidding war. Management will have no problem finding a white knight.
I do not see Oncolytics going on the auction block. The industry players know a good thing in having Oncolytics as a separate development company. The potential breadth of application of Reolysin in combination with other therapies could be limited if one company acquired Oncolytics. I do not see this outcome as a good thing for some cancer patients. Oncolytics also has announced patents where Reolysin is used beyond cancer treatment.
My crystal ball takes into consideration the appointment of Allan Warrander, SVP, Global Licensing & Business Development. I see Oncolytics becoming a joint venture company where shareholders gain a number of pharma companies as partners. I see our new partners footing the bill of future capital requirements. I like this structure. I get to participate in the long term success of Reolysin or choose to walk away. You can only sell the farm once.