Disclaimer: VFC has no affiliation with Cel-Sci Corp or with any third parties associated with the companies. VFC has received no compensation for this blog post, although there may be an unrelated advertisement or two at various locations on this blog. VFC does not offer advice or investment services and nothing you read here should be construed as such. VFC is just a guy with an opinion and access to a computer and a keyboard; bringing discussion and ideas to the table. #AhYeah.
Cel-Sci Corp (CVM): Cel-Sci is a perfect example of a company that has gone through its highs and lows while being highly tradable along the way. Now, tho, the story is a bit different as we are in the Endgame for the long-ongoing worldwide trial investigating the effectiveness of lead product candidate Multikine in the treatment of head and neck cancer. We've already re-hashed what Multikine is and what it may be able to do in previous blog postings, but a couple of things have changed the last time I wrote. Most notably, the Russell.
It was announced earlier this month that CVM met the criteria for inclusion into the Russell 3000 and Russell 2000 indexes. Inclusion commences on 1 July, with the final day of "reconstitution" falling on 28 June - the final trading day of the month. It is expected to be one of the highest trading days of the year, according to the Internet (Russell website) and historical trends. This is huge for CVM, as shares will be picked up and traded in various funds that track the broad stock market. It also lends an heir of credibility to an otherwise little-known small cap that doesn't seem to be on the radar of main street.
Naturally, that's a plus for CVM as any accumulation of shares should form a good trading base moving forward and is a useful tool to combat the heavy short interest of the stock. Stats for short selling are always a few weeks, at least, behind in being reported, so there's no immediate indication that inclusion in the Russell will compel the shorts to cover - but it is a possibility. This convergence of events could bode well for the short term trading patterns of Cel-Sci.
It also has attracted the attention of the day, swing, and momentum traders, according again to the Internet (this time Twitter), where you can type in $CVM and see that Cel-Sci is listed on multiple trading Tweets and momentum watch lists. So while all these factors could lead to a nice little uptrend in the CVM action, you can count on quite a bit of volatility, too, as funds take up their positions and traders play their games. For those investors willing to buy on the dips and then take some money off the table into the spikes - to realize those trading gains - it could be quite the rewarding period coming up.
That said, let's not kid ourselves away from the fact that this is still a Multikine results play. The trial results will dictate the future direction of the Cel-Sci stock. If the results are successful - remember, the company is shooting for 10% survival improvement over Standard of Care (SoC) treatment - then the stock will boom. If the results miss and the trial fails, then no amount of Russell inclusion is going to keep CVM afloat. So, investors taking a position in this company are taking those positions on the long or short side of the Multikine story.
On the positive note, inclusion in the Russell is good, of course, and it's a decent sign that company CEO Geert Kersten and other top officials have purchased shares recently at market price, while some employees are taking shares in lieu of salary. Each investor will have to draw their own conclusions about how relative this is to the long argument, as some believe that the purchases lack major conviction (in relative terms to overall value), while others believe that these facts are a telling sign of belief in Multikine success. Truth is that none of these people should have insight into the trial results, if everything is moving along on the up-and-up, but the argument by shorts that these shares are purchased to dupe the small investors is pretty soft, because even though rich people have enough money to lose, it doesn't mean they like losing it. Especially with so much already on the table.
The major point to the long argument that sticks is that the longer the trial continues, the more it possibly indicates that Multikine is working. Two ninety-eight is still the magic number we are waiting for, because once 298 deaths occur, then the trial will wrap up and results will be known (at some point thereafter). It is also possible that the effects of SoC are also keeping people alive longer, but again - each investor will have to find his or her own comfort zone as to whether or not they believe it's SoC alone that continues to push the 298 event milestone to the right.
As mentioned in my previous blog posts, the IDMC recommended continuing the trial earlier this year, too. Longs see that as another telling sign that the trial is succeeding, figuring that if it had already failed, then the IDMC would have killed it for futility. Shorts will say that that the IDMC is just looking at safety, not results, so there is no chance they could kill it for futility. There is plenty of evidence out there on the Internet, tho, that shows that IDMCs look at safety and effectiveness, so again - each investor is going to have to find a personal comfort zone with the news and invest (or not) accordingly.
Regardless of the eventual outcome, shares of Cel-Sci are still at more than a double since earlier this year. That kills the short argument that other bloggers make about staying away from speculative stories like this one. With a little patience, due diligence, and the ability to take emotion out of the trading game, everyone can do pretty good in this little stock market world of ours. It's nice to see those computer screen gains, but they're just paper gains until they show up in the cash balance. I'm always a fan of trading some paper gains for some realized cash balance, because watching a run where I didn't sell anything turn into a crash where all the paper gains become paper losses is worse than watching a run continue when I've already banked a bit of profit. That's just me, tho, based on my experiences.
It'll be tough for some to shake the volatile past of investing in Cel-Sci, but one can take solace that - one way or another - the end of this long and drawn out story is near. These Multikine results can't be too far out into the future - and if you're riding on house money at this point, then it should be relatively stress free from this point on. Given the lack of analyst coverage and the general lack of main street interest - it could be said that Cel-Sci is still trading under the radar at this point. The relatively low market cap of the company - considering the late stage of a potential breakthrough cancer treatment - is another indicator that either no one is paying attention, the street has no faith, or - and this is the scenario that I believe is the case - people are sitting on the sidelines with an "I'll believe it when I see it" mentality in anticipation of results. At that point they'll jump in (or not).
If successful, then those in early will bank the most impressive overall gains. If the results miss, then those on the sidelines will just move on and the shorts who have increasingly taken an interest in Cel-Sci will bank their profits - and also move on.
It's definitely a volatile story, the Cel-Sci one. A story I've followed for more than a decade and am pretty stoked that it's so close to the end game. It's encouraging that this new breed of cancer immunotherapeutic treatments that it seemed like a over a decade ago everyone was saying wouldn't work, has caught on and is extending the lives of cancer patients. Should Multikine prove successful, then it could usher in the next generation of such treatments.
Definitely one keep an eye one over the coming months. We should be getting close.
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