After hours yesterday Avacta (AVCT) announced that it had successfully raised £12.5 million at 68p. Up to a point. I have now seen communications from Zeus Capital with regard to what it termed “Project Hawkeye,” the culmination of a few weeks of frantic share ramping via RNS and research pumping the stock from the very same broker that would soon be doing a placing.
I exposed my first biotech fraud back in 1992, sinking its IPO, when most Avacta (AVCT) shareholders were still in short trousers and I’ve been writing about the sector ever since. My first lawyers letter from a biotech fraud I exposed came in 1994 my second in 1996. Most of my bearish articles are not about frauds but valuation. The issue with Avacta is just one of valuation. But, apparently, I do not understand the maths or the science say the “experts.” Why not ask someone who does? So I started with Jim Mellon who has made hundreds of millions of pounds in this sector.
Shares in Avacta (AVCT) spiked to 81.5p, a market cap of £385 million on the back of a ramptastic RNS. But they are now slipping back and trade at 79p. The smart money, aka Liverpool’s Greatest numbers man since Ken Dodd, Mr Evil Banksta, used the spike to increase his short and here’s why. There are three reasons.
Between now and 28th July you can win a week at the Greek Hovel paying just a cleaning and pool fee – by explaining in 300-1000 words why if you had to bet everything on one share on a three year view what that share would be. To see how to enter go HERE and PLEASE KEEP SENDING IN ENTRIES. Twenty fifth up is SD1983
Folks can get understandably emotional about cancer. I remember chatting almost thirty years ago to a cousin of my mother whose wife had, sadly, died at all too young an age from breast cancer. The chap said that in her memory he had bought a large number of shares in British Biotech, a company that at one stage was bigger than Railtrack, a unicorn.
I must take my hat off to the team at Avacta (AVCT) and Zeus Capital for raising £16 million at 63p. It is a crazy valuation for a company not yet out of phase 1 trials but a series of ramptastic RNS’s and a gullible investor community have done the trick. The shares are now 65.5p.
Worried bears and deranged bulls alike plague me about Avacta (AVCT) now that its shares have recovered to 44.75p. For most of the past three years such a share price would have been seen by the bulls as a disaster now it is posted as a triumph. Is the company turning the corner? Is the pope a Methodist lay preacher?
There are some things we can all agree on. The management of Avacta (AVCT) are aggressive stock promoters. Their record of poor judgement and bad diworsification M&A deals are clear or all to see and the company will need to do a fund raise if it is to hope to progress its lead product, AVA 6000, through phase 2 trials.
The real problem Avacta (AVCT) is that trials of its lead product, the store of all the hopium in the share price, does not seem to work as Deutsche bank pointed out last Autumn.56 patients took it none were cured. If those results don’t change there is no way that AVA 6000 will make it out of phase 2 trials with Avacta, just as it failed to make it out of phase 2 a decade ago under its previous owner. That is the harsh truth chatroom gerbils have yet to accept.
What is it about Avacta (AVCT) that attracts the nastiest and stupidest folks in Britain to its shareholder list? When you, as a bear, are up against cretins with an IQ of a park bench you know you are onto a winner. Meet ModernAngel another coward tweeting behind a made up name.
