RE:RE:RE:RE:RE:RE:RE:Used BioTech Company For Sale by Owner - 600M OBO. I hate (hate,hate) to add to all the metaphorical shenanigans...but ok. First off, the roughly 25% drop in SVA share value is relatively recent compared to the overall market swoon, but is now more in line what everything that MS predicted would happen as central banks started stepping in to quell the inflationary pressures upon us. So this isn't just biomed stocks getting hammered. 11 days ago I purged the last of my O&G winners even though there are likely to be announcements of record profits in the coming weeks (and some likely dividend bumps as well). Why? Because the market is pricing in events and outcomes a year from now (not the next six weeks, next two quarters etc.). Cash wins right now, and as tempting as in really tempting, it is to buy more SVA at these levels, another few days of turmoil might just make the "get (more) back in" strategy even more attractive.
Should we all pile on and say the institutional investors should have been on boarded sooner, or that the Evotec deal was too late given where (and how slow) the science is playing out? Maybe. Right now, if I were an institutional funds manager with cash to invest in SVA, I'd be watching too. If I were Evotec, I'd be wondering how Phil and the board got me to pay up when all the folks on Stockhouse knew there would be a 25% devaluation right around the corner (sarcasm). Am I still upset with our "friends" in the black SUV's and the rest of the manipulators of this stock? Yes. Do I think things can only get better on the TSX. Yes. They might get worse for a bit...but in the long run, that graduation moment was important. Will the board continue to hand out DSU's like every day is Christmas bonus time? I don't think so now that Evotec is part of the "go forward" plan. Bottom line: are the wheels falling off this ride? My sense is, this thing really is healthier than its ever been...and coming from me, that's saying something. Continue to pile on if that makes you feel good. I'm thinking that the Evotec deal changed things for the better. Would we still have seen a precipitous drop around this time if the deal was announced 6 months ago? Yup. And for that reason I'd still be looking at where I think the value will be in fall 2023. In the meantime let's see if this goes to a buck, and if it does who I'll be trading with :)
DF