MARTIN SHKRELI STRIKES AGAIN

This is the worst short squeeze I’ve ever seen. Reason being: just Friday the company declared they were done, through, kaput.

Nov 13 (Reuters) – Drug developer KaloBios Pharmaceuticals Inc said it would wind down its operations and that it had engaged restructuring firm Brenner Group to help liquidate its assets.

The company said it was highly unlikely that exploring strategic options could generate a viable transaction within the time frame, given its limited cash resources.

Apparently, the Friday the 13th massacre was only delayed for shorts, which represent at least 10% of the outstanding shares.

I want you to put this story into real life perspective.

Imagine yourself to be a reasonably smart man, fairly liquid in the market. You see the KBIO news on Friday and you’re pleased because you’ve been short from the time the FDA said to “fuck off”, when the stock gapped down from $14 to $4, earlier this year. You were victorious and you celebrated this immense victory with your wife, over steaks, shrimp and champagne cocktails.

Monday swings around and the stock is percolating a bit. You chalk it up to wild eyed speculation, which normally accompanies companies that go bust. You had 10,000 shares short at $4, and decided to double that position to 20,000 shares, selling short MOAR at $2–giving you an average cost of $3.

After the market closed today, you felt confident that your $60,000 short position would pan out. The stock had been lower by 2.76% in an otherwise rip-roaring tape. After all, the company said they were done and that it was “highly unlikely” any strategic options would materialize, other than liquidation.

Then you get a news alert that Martin Shkreli bought 1.2 million shares, most likely due to his desire to reverse merger his company, Turing Pharmaceuticals, into KBIO’s lifeless shell. The internet buzz was enormous and the stock fucking took off. It leapt from $2 to $10, then $15, then $20. Your $60,000 position and $20,000 unrealized gain has morphed into an astounding $340,000 loss. Your entire account was only worth $250k, money that you had saved up over the years, set aside for retirement.

It’s all gone. All of it.

Tomorrow morning you stand at the mercy of the market. Ever point is an additional $20,000 loss. Your broker will liquidate all of your holdings to cover the losses, unless you’re able to wire in $90,000 to get back to zero and whatever funds necessary to hold your other positions. If they’re 50% marginable, you will need to wire in $215,000 before 10am.

Now if animal spirits jack KBIO to $25 or $30, the dynamics of your loss change, drastically. Total losses can quickly escalate into the $500k area–all because of one little man buying into an already defunct biotech company.

Fuckery at its finest. I feel for anyone who is short KBIO. You shouldn’t have to deal with this sort of curveball. But the market is cruel and unforgiving and mean-spirited.

This is fuckery largess. This is madness. This is lunacy. This is biotech listed on the NASDAQS.

Asshole CEO of Turing Pharma, the same loser who proudly boasted about jacking prices higher for his bullshit drug, which was the initial cause for the biotech rout, announced that he purchased a shitload of KBIO, about 40% of the company.

KBIO had announced they were winding down operations and the stock was 24 cents as of yesterday. Right now the stock is about $15.

The speculation is Marty will reverse merger his piece of shit company into KBIO. This, of course, means that another bullshit biotech company will be publicly traded, available for short sellers to drive into the dirt.

But, in the meantime, rabid dogs are bidding up KBIO in the after hours, as if KBIO had a cure for cancer in its vaults.

According to the above filing, Marty bought about 1.2 mill shares for around $1.6 mill, putting his cost basis about $1.32–for a paper profit of approximately $16.5 mill.

What a decadent day. Almost 100 NASDAQS were added to the National Treasury. For some reason, today investors were accepting of a Fed hike in December. They’ve come to grips with the notion that the end of western finance, as we know it, may not be beckoning.

Stocks are dirt cheap on a price/sales basis, the cheapest in several sectors in over a decade.

LISTEN TO ME: I trust this tape, like I trust the airbags in my car from stranger danger. I’m not depending on miracles to help me. Like I said earlier, this is an oversold bounce. The rubber band was stretched back real far, causing the spear to shoot forward and sever the heads of Mr. Short Sellers–fucktards extraordinaire soiling my comments section with end of days rhetoric.

There is nothing that I like more than a short squeeze, offering these scoundrels up to the lord, sacrificial lambs on my dinner plate. I consume you (extra cannibal) because I am alpha to your beta. Run away and tell your wives how hard the market was today.

“The Fly” banked coin, up 2.3% for the session– despite SHAK being a total drag.

NOTE: I am taking on 5 new bloggers next week. If you have an interest in joining the Peanut Gallery ranks, email me at Flybroker @ gmail.com. Be sure to add your Twitter handle, so that I can review your skills.

The leadership sectors are in the most beaten down stocks, aluminum names, commodities destined for zero but first bouncing off the concrete for fun. If this were a serious rally, financials would be leading, since higher rates helps them most.

On Friday, Exodus flagged oversold. I felt so comfident about that signal, I had a video done in its honor.

Then, due to the novelty of the whole video making business, I made another one.

Which one do you like better?

In case you’re wondering, I’m doing well today. Nothing terrific, but well enough to justify punching one or two homeless men before heading to dinner.

Top picks: COST, CNC, PAH, SHAK

Their willingness to destroy the U.S. economy is impressive. A plus for persaverance.

“Members emphasized that this change was intended to convey the sense that, while no decision had been made, it may well become appropriate to initiate the normalization process at the next meeting,” said minutes of the FOMC’s Oct. 27-28 meeting, released Wednesday in Washington.

A majority of Fed officials have signaled they expect to raise interest rates this year for the first time since 2006. That message was underscored when policy makers inserted a reference to the “next meeting” on Dec. 15-16 in their October statement, in connection with their assessment on when to act.

A “couple” of voting policy makers had qualms that the wording change “could be misinterpreted as signaling too strongly the expectation” for December liftoff, according to the report.

Participants in the meeting “generally agreed,” the minutes said, “that it would probably be appropriate to remove policy accommodation gradually.”

“It was noted that the beginning of the normalization process relatively soon would make it more likely that the policy trajectory after liftoff could be shallow,” the minutes said.

The market is responding positively to the minutes. Hell, if space aliens destroyed Moscow today, stocks would continue higher on hopes that a new Moscow would bolster worldwide growth. It’s just one of this runaway train type of days.

Enjoy.

Fed’s Mester says the economy can handle a 25 bps hike; Fed’s Lockhart says he is confident the Fed is ready for normalization; Fed’s Dudley says he looks forward to the day when the Fed can raise rates

This is all I read these days, Fed comments sucking the varnish off that Federal Reserve rate hiking lever. Sometimes I ask myself “but why?” Then I remember that they just want to bankrupt CHK.

All of this rate hike talk is absurd. But who am I to player hate? If the Fed thinks it’s a good idea to literally crash the economy, I think it’s a good idea too!

Today at 2pm est, the Fed minutes will be released. We get to eavesdrop on the head nerd, J. Yellen, and her band of bumbling idiots, discuss the virtues of the U.S. economy–as retail stocks plunge by 35% off weaker than expected sales, oil and gas stocks careen lower on a never ending decline in crude, as copper stocks flirt with disaster, and as tech bellweathers plunge to multi-year lows due to an onerous business environment.

I need more SHAK in my life like I need a hole in my head. Since I’m fatalistic, I added to my position, which has dropped by 20% since the day I menaced short sellers that their day of reckoning had come. The earnings were so good, I was besides myself with joy, glee, and all of the idiot emotions that cause humans to behave badly.

In my defense, I didn’t put my balls where my mouth was, instead opting to wait until today to add to an already large and down position.

It’s important to note that the weakness in SHAK isn’t an isolated event. Aside from the fucking assholes at MCD, the restaurant sector is in the shitter now. It’s as if everyone has collectively lost their minds, sold out from all of the good restaurant stocks in favor of MCD.

I can’t even talk about it.

What am I looking for with SHAK, going forward?

Greatness, on an extreme scale. My downside is $28, with a long term upside of $125. The company intends to build out to 400 eateries, from the 90 or so they have now. This is a fast growing company with great brand awareness. I love buying great companies after they’ve been cast aside for the animals to pick away at.

Even still, the stock has been a huge, flaming, bag of shit on my front door.

It’s that time of year again, ladies and gents. It’s a time when we sloth about the house, preparing for national festival. Our great lands were settled by maniacal pilgrims many yeara ago. Before they murdered all of the Indians, who lazily lived on these lands in grass huts, they befriended them and shared a large wooden dinner table with them, to feast upon corn and cranned berries, turkey, and mashed potatoes with gravy.

In a little more than a week, most of you will be sitting around the fire, watching football, smoking your pipe, asking your wives to fetch you another lager. Your bellies will imitate a waterbed in its movement, as you swashbuckle around the house eating delicacies.

The stock market doesn’t trade down during national festival, the day we broke bread with the savage, just before killing them.

THE TURKEY GODS ARE UPON YOU, granting wishes and monetary gifts through the exchanges. Bears are completely outmatched this time of year. They hate Thanksgiving and wished it never happened. As we celebrate and drink and carelessly buy stocks, they eat gruel and become meaner and they toil away late into the night to bring about the destruction of the United Steaks of America.

2015 has been a hard year for you. Now is the time to unwind, take free money, and prepare for gluttony on an industrial scale.

I’m all for crazy. But this morning’s Goldman Apple rationale steals the show. They’re projecting Apple will switch into a services company, ditch the whole growth model, and focus on monetizing their business.

Why does Goldman think this?

Umm, just because.

Theoretically, Apple could transition other products to installment plans as well, and charge customers a monthly bill that also includes its other services such as Apple TV and Music. We think a potential live TV service from Apple would be a key enabler of this transition to an “Apple-as-a-Service” business model.

They even took the time to lay out their fantasy island projections, suggesting that revenue per customer could jump from $41 to $153 (LOLz).

What does it all mean, man? It means revenues (takes pull on marijuana filled blunt) can jump to $553 billion by 2017, from the current $233 billion.

Their price target is $163.

The consumer is dead for those who domicile themselves inside of shopping mallls. For those outside of them (ULTA, COST, TGT, HD, LOW) things are ok.

Target, the fourth-largest U.S. retailer, also raised the lower end of its earnings forecast for its fiscal year. It said it expected earnings of $4.65 to $4.75 per share, excluding special items, against its previous outlook of $4.60 to $4.75.
The Minneapolis-based retailer’s shares were up 2.8 percent at $74.36 in premarket trading. At Tuesday’s close, they had fallen nearly 4 percent this year.
Excluding special items, earnings came to 86 cents per share in the third quarter ended on Nov. 1, compared with 79 cents a year earlier.
Net sales rose 2.1 percent to 17.6 billion.
Analysts on average expected profit of 85.9 cents per share on sales of $17.57 billion, according to Thomson Reuters I/B/E/S.
Target said sales at stores open at least a year rose 1.9 percent, beating the market consensus of 1.7 percent, according to research firm Consensus Metrix.

I find the retail landscape to be interesting now, with the very large box stores dominating the smaller players. Very soon, we will all shop from one store and buy things in an orderly fashion, like robots.

As an aside, Square prices its IPO today. So exciting (Colonel Landa voice).