No Fingernails Left : Prima Biomed

This, my friends, is a cliff:

The Prima Biomed Cliff

The Prima Biomed Cliff

And this is a cliffhanger :

Hmmm... Doesn't look like Mark Voigt?

Hmmm… Doesn’t look like Mark Voigt?

We have been witness to an extraordinary couple of days in the life of Prima Biomed (ASX:PRR). Not only was the initial ASX pop on the CVac announcement, quite frankly stunning, but the ADR traffic has been phenomenal. It’s too early to tell if we are quite yet going to see a free-fall but the pre-market trading (and US murmurs) look a little challenging for the stock and a crazy amount of volatility is going on out there. That, I suppose, is one of the “joys” of a dual-listed company – Aussie investors get to have a bit of a restless night watching how the US market opens and then BLAM.

I think there is probably a basis for a little stock appreciation after a pretty low, long and flat run, given the fresh priorities of the company and the fact that the CVac announcement effectively marks the end of company focus and resource investment in a clinical program that has essentially no go-forward commercial value for the company. CVac may yet get a partnership, but I don’t see one on the table anytime soon and I have previously put the probability at less than 10%.

In short (pardon the pun) this incredible spike is, in my opinion, a stratospheric pump-and-dump scenario that is the perfect storm combination of the frothy retail holding in this stock, some recent hedge-fund attention and fairly decent short anchor. The dual listing no doubt adds some drama as well. The result is the stock market equivalent of a sling-shot. Unfortunately, my fear for those retail punters our there, is that this shot is going to land with a pretty heavy thud once the firms driving this bus have finally made a few bucks out of PRR. Plus it’s getting later in the week and not even the lunatics are going to want to ride this one over the weekend.

I am going to go out on a limb and guess that once everyone realises that this is a completely baseless share movement, we’re going to end up just higher than pre-announcement levels. Maybe settle in at 3.5c (ASX) at best. It would still be a generous outcome for PRR/PBMD and a nice little bump for those long-term investors (not punters) out there.

It’s going to be a restless night Down Under…

Sleep tight!

The latest trend in share trading technology...

The latest trend in share trading technology…

5 thoughts on “No Fingernails Left : Prima Biomed

  1. I’m going to go out on the other limb here for tonight.

    PRR has just closed at 9.1c. Down about 40%. This roughly equals about $2.18 in the US compared to the $3.00 it closed at last night.

    A significant amount (50%+) of the volume on the Nasdaq last night was short. The shorters will want to recover their losses from the previous night and should feel they are now on the right side of the trend.
    Which sets them up nicely for a big joke. Burn the shorters in the US the first night. Then do the longs on the ASX. On the third night do the shorters over again just for the heck of it.

    Keep repeating and then in a few days pick up a truck load of shares at 1.7c. – provided you control enough shares to put the vote in your favour which might be important if there is strong retail dissatisfaction here.

    So the funniest outcome tonight is for the Nasdaq to fall initially … and then rise. So that has to be the correct bet.


  2. Pingback: NVG, ANP, PYC, ACL, OBJ : A Week in Contrast | The Long Tail

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