April 16, 2020 8:37am

The problem is value sustainability - been where, done what and why as we brace for an atrocious jobless report of 5.24 million claims with 22 million filing for unemployment and a negative -22.3%plunging housing starts and permits

News: Athersys (ATHX) closed flat at $3.10 and has a negative -$0.80 or -25.81% pre-market indication) priced a public offering at $2.25 per share for purchase of 22.25 million shares – it was expected, SELL;

Sector intel, ideas, fact-based opinions and Insight in a volatile climate and the extenuating factors of share pricing; check the BOTTOM LINE and profit from RMi’s analysis!

Dow future are UP +0.21% (+50 points), S&P futures are UP +0.39% (+11 points) and NASDAQ futures are UP +0.85% (+73 points)

 

U.S. futures point to an up but, weak opening ahead of key jobless claims data;

European markets were up as individual countries begin identifying their release from lockdown measures with the pan-European Stoxx 600 climbing positive +1.1% in early trade;

Asia Pacific markets were mixed with Australia’s jobs data coming in above expectations, japan fell, South Korea was flat, and Mainland China edged higher as the MSCI Asia ex-Japan index slipped 0.61%.

 

Data docket: Labor Department’s report on last week’s initial jobless claims and housing starts. On the EU data front, euro zone industrial production figures for February are due.

 

Henry’omics:

Thursday’s upside moves more than probably weak follows a slump during regular trading on Wednesday as gloomy economic data and anemic bank earnings fueled concerns over the coronavirus’s impact on the U.S. economy.

The economic reports showed the double whammy of state shutdowns in mid-March on two pillars of the economy — the consumer and businesses. The manufacturing reports were even more dire than expected, and foreshadow even worse declines in April’s activity, with state shutdowns affecting areas responsible for more than 90% of the economy.

The real numbers speak as jobless figures will provide a key tracking of the health of the market after last week’s 6.61 initial claims. Total claims over the last three weeks add up to more than 16 million, implying that about 10% of the U.S. workforce had filed for unemployment benefits over that time.

  • So, who is buying and selling “our” universe?
  • Also, get out the microscope to get a measure of expectations.

 

The BOTTOM LINE: Traders are NOT utilizing fundamentals as electronic trading is setting the buy/sell ranges and brokers can’t fight the algorithmic “rules” pushing the velocity of share pricing.

As we determine whether bottoms are coming, real and solid - I personally believe that a company’s “reputation” needs to be CONSIDERED as a SERIOUS factor for any BUY.

  • There is too much “spin” or lack of truthful information released by “some” companies.

Review the “vibes” that emanate from a company’s culture especially the turn-over rate of a management team and scientists and specifically those who were brought-in to marshal the development and corporate process. Remember, it’s an honor and a legal duty to be considered a “canary in the coal mine”!

 

Wednesday night’s title: “As I had stated, yesterday’s rally will give way to renewed selling pressure. The FOMO – the fear-of-missing-out theory just got debunked by today’s sector and market collapse; truth is harsh, but reality is what it is!”

  • The NASDAQ closed DOWN -122.56 points (-1.44%);
  • The IBB closed down -2.49% and XBI also closed down -2.47%;
  • The CBOE Volatility Index (VVIX: INDEX) tracked up +3.08 points or +8.18% at 40.82;
  • The sector closed negative with an Advance/Decline (A/D) line of 6/29;
  • The % of the 6-upside were +0.22% (ATHX) to +16.17% (PSTI) while the 29-downside ranged from -0.88% (BCLI) to -27.66% (FIXX); 
  • 3 out of the 6-upside had higher than the 3-month average volume;
  • 6 out of the 29-downside had higher than the 3-month average volume;

Q2:

  • April registered 5 negative, 5 positive closes and 1 holiday.

Q1:

  • March registered 11 negative, 10 positive closes and 1 neutral close.
  • February registered 9 negative, 9 positive closes, 3 vacation days and 1 holiday.
  • January registered 9 negative, 10 positive closes and 2 holidays.

 

Companies in my headlights – It’s your decision; I provide an idea and context:

News: Athersys (ATHX) continued from title … Gross proceeds to ATHX from the offering are expected to be approximately $50.1 million, before deducting the underwriting discount and estimated offering expenses. In connection with the offering, ATHXs has granted the underwriters a 30-day option to purchase up to an additional 3,337,500 shares at the public offering price (less the underwriting discount). The offering is expected to close on April 20, 2020, subject to customary closing conditions. BofA Securities is acting as sole book-running manager for the offering. Needham & Company, SMBC and WBB Securities are acting as co-managers for the offering. IT WAS EXPECTED – SELL …

… ATHX (with a negative -$0.80 or -25.81% pre-open indication) or -always need access to the public trough for financing having “raped” shareholders’ appreciation for years

… Pluristem (PSTI with a negative pre-open -$0.44 or 4.47% indication having closed at $) will be next to jump through the public finance window …

 

Opinions expressed are those of the author and are subject to change, and not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors.  All investments are subject to risks. Investors should consider investment objectives.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.