Special Biotime (BTIM) Stock Update

Fellow Friends and BTIM Traders,

I never thought I would see BTIM down $3.00 after the China deal was announced. Wrong!! Risk was down $3.00 and now up $19 over next 2 years.

I won't go over ground covered in last week's email. Monday was not margin selling. Over 150,000 shares traded on a break of $4.00 after 3:30 PM and closed on the low $3.75.

I tried calling the company after I got home from jury duty. No answer.  My first thought the company called the 8 million warrants. But BTIM wrote in an offering memo that the company may call the warrants if the stock traded over $4.00 for 20 days. Yesterday was day 17. No calling of the warrants I thought.

Today, BTIM traded down hard to $3.17, hitting the 200 DMA and a congestion sideways support area (see BTIM 2 year chart). I estimated BTIM traded down there on less than 100,000 shares.  The stock rallied back nicely on nearly 400,000 shares traded in total and closed on the afternoon high tick of $3.58. I like today's reversal tail on the chart.

I spoke to the Al Kingsley, BTIM largest holder and head of his money-management firm Greenway Partners. I asked him point blank did the company call the warrants. His answer, "Did you see any announcement?" No. Then that's your answer.

He added that the company’s been through a number a bear raids throughout its history. Haven't you over your investment career? Yes. Well? I noted BTIM’s short position was nearly 20% of the public holding or 1.7 million shares short. So, it's reasonable to assume this was another bear raid given margin calls and the breaking of the 50 DMA last week. Pure and simple, no secrets here.

The drop shouldn't have anything to do with fundamentals. Even animal testing won't start until mid-2010 and human trials by mid-2011. No one's died yet!

I hope this helps. I'm suffering financially just a bit down here. BTIM’s price recovery may take awhile to get the stock back higher since significant technical damage has been done. But at least all the weak sisters (a weak holder – Wall Street slang) are gone or will be gone soon.

Have a great Turkey Day. I know I'm thankful for much and for just surviving this raid.