3SOF

Hi, David:

  Do you have any stop-loss trading plan or simply hold it no matter what happens for this stock?

  For momentum stocks, if it break-down its 9-ema, I will sell it.

I'm back in at 2.50 today. Pretty cool - I bought at 2.50, sold at 3.05, now back in at 2.50. Lather, rinse, repeat. Today's candle was exactly what I expected to see (which btw only happens maybe 1/3 of the time) - a red candle, retesting yesterday's low and the 20 ema, but not making quite as low a low as yesterday.

White candle is my call for tomorrow

hi,
i saw this similar trading with 'smdi' a few weeks ago. it was stuck at 460 with lots non stop buying all day for aout 3 days, finally it took off above 5.
i noticed today a constant stream of buys at 2.50. this looks like it is setting up to go higher imho,
hope so  ,
maxi

Quote from: shawFund on January 24, 2006, 01:20:02 PM
Hi, David:

  Do you have any stop-loss trading plan or simply hold it no matter what happens for this stock?

  For momentum stocks, if it break-down its 9-ema, I will sell it.

No, no stop loss, I don't consider INSM just a momentum stock, I also have a fundamental reasoning that keeps me on board despite the short term volatility.

This probably explains the last 4 red candles:

«Item 3.02 Unregistered Sales of Equity Securities

Between January 17, 2006 and January 24, 2006, Insmed Incorporated received notices from holders of its 5.5% Convertible Notes due 2008 - 2010 electing to voluntarily convert $4,175,000 principal amount of Convertible Notes into 3,223,927 shares of common stock at the conversion rate of one share of common stock for each $1.295 in principal amount of the Convertible Notes. The Company also received $3,310,735 from warrant exercises that resulted in 2,434,364 shares of common stock being issued at an exercise price of $1.36. The number of shares issued pursuant to the conversion of the Convertible Notes and exercise of warrants since January 13, 2006, the date of Insmed's last report under Item 3.02, exceeded 1% of Insmed's outstanding common stock on January 18, 2006.

The common stock issued upon the conversion of the Convertible Notes and the warrants was issued in reliance upon the exemptions from the registration requirements of the Securities Act of 1933, as amended, provided for in Section 3(a)(9) and Section 4(2) thereof and is all currently registered for resale by the holders pursuant to Insmed's Registration Statement on Form S-3 filed with the Securities and Exchange Commission on August 8, 2005 (the "Registration Statement").

Following the conversions described above, $6,013,000 principal amount of the Convertible Notes remained outstanding. In addition, because certain of the Convertible Notes were converted prior to the March 1, 2006 quarterly interest payment, the Company issued an additional 24,068 shares of common stock for the forfeited cash interest payment at a conversion price of $1.295. A summary of the terms of the Convertible Notes and the warrants, including the conversion features and interest payments of the Convertible Notes was previously provided in the Registration Statement and Insmed's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 16, 2005 (the "Current Report"). The forms of the Convertible Notes and the warrants were filed on a Current Report filed with the SEC on March 16, 2005. The Registration Statement, the Current Report, the forms of the Convertible Notes and warrants are each incorporated herein by reference.»

Probably these 3,223,927+2,434,364+24,068 = 5,682,359 shares were sold in the open market by these previous bond holders for about a 100% profit.

Over the last 5 day's about 28 million shares changed hands so I guess these 5.68 million shares were already sold.

Nothing to worry about, I expect INSM to recover all its losses and make new highs above $3.35 soon.

Took position the third time on INSM today.

At least it should have a mini bull run.

QuoteWhite candle is my call for tomorrow

Wow, call me Kreskin! My call for tomorrow is another white candle. If I get it right, I might start charging for my predictions!

Interesting play. Will put on radar for tomorrow.

Quote from: Lucas Scott on January 25, 2006, 05:16:59 PM

QuoteWhite candle is my call for tomorrow

Wow, call me Kreskin! My call for tomorrow is another white candle. If I get it right, I might start charging for my predictions!

Yeah, nice call Lucas Scott 

I was losing 11% yesterday, now only 3.5%, and I guess I'll end the week winning. If it were just for technical analysis, probably I would be out with a loss now, but there's a fundamental background to this trade, a sound one, I believe.

INSM will probably launch IPLEX for commercialization over the 2nd quarter of 2006. It is just a $148M market cap. I think it will be at least $300M before the second quarter ends, so I'll continue holding INSM.

Dilution is the reason for todays pullback. Total shares outstanding are about 55 Million


Form 8-K for INSMED INC


--------------------------------------------------------------------------------

24-Jan-2006

Sale of Equity



Item 3.02 Unregistered Sales of Equity Securities
Between January 17, 2006 and January 24, 2006, Insmed Incorporated received notices from holders of its 5.5% Convertible Notes due 2008 - 2010 electing to voluntarily convert $4,175,000 principal amount of Convertible Notes into 3,223,927 shares of common stock at the conversion rate of one share of common stock for each $1.295 in principal amount of the Convertible Notes. The Company also received $3,310,735 from warrant exercises that resulted in 2,434,364 shares of common stock being issued at an exercise price of $1.36. The number of shares issued pursuant to the conversion of the Convertible Notes and exercise of warrants since January 13, 2006, the date of Insmed's last report under Item 3.02, exceeded 1% of Insmed's outstanding common stock on January 18, 2006.

The common stock issued upon the conversion of the Convertible Notes and the warrants was issued in reliance upon the exemptions from the registration requirements of the Securities Act of 1933, as amended, provided for in
Section 3(a)(9) and Section 4(2) thereof and is all currently registered for resale by the holders pursuant to Insmed's Registration Statement on Form S-3 filed with the Securities and Exchange Commission on August 8, 2005 (the "Registration Statement").

Following the conversions described above, $6,013,000 principal amount of the Convertible Notes remained outstanding. In addition, because certain of the Convertible Notes were converted prior to the March 1, 2006 quarterly interest payment, the Company issued an additional 24,068 shares of common stock for the forfeited cash interest payment at a conversion price of $1.295. A summary of the terms of the Convertible Notes and the warrants, including the conversion features and interest payments of the Convertible Notes was previously provided in the Registration Statement and Insmed's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 16, 2005 (the "Current Report"). The forms of the Convertible Notes and the warrants were filed on a Current Report filed with the SEC on March 16, 2005. The Registration Statement, the Current Report, the forms of the Convertible Notes and warrants are each incorporated herein by reference.

Painful.... Hope it recovers soon. I'm holding long term  - anyone else?

I nibbled a bit at $2.52

QuoteDilution is the reason for todays pullback. Total shares outstanding are about 55 Million

Hello finagler, actually I think the share count is more than 55 million. Over the last 10-Q filed with the SEC we have this:

«As of November 1, 2005, the latest practicable date, there were 54,425,460 shares of Insmed Incorporated common stock outstanding.»

We also have this:

«On March 15, 2005, the Company entered into several purchase agreements with a group of institutional investors, pursuant to which the Company issued and sold to the investors approximately $35,000,000 aggregate principal amount of 5.5% convertible notes, which notes are convertible into common stock, par value $0.01 per share, as well as warrants to purchase, in the aggregate, 14,864,883 shares of common stock, at an exercise price of $1.36 per share. The principal of each note will mature and be payable in nine quarterly installments of approximately $3,890,000 commencing on March 1, 2008. Any outstanding notes must be repaid in cash or converted by March 1, 2010. As of June 1st, 2005, the holders of the notes began to receive interest payments at a rate of 5.5% per annum. Interest on the notes is payable quarterly until March 1st, 2010. The holders of the notes may convert the notes into common stock at a conversion price of $1.295 per share as adjusted in accordance with certain adjustments for stock splits, dividends and the like at any time prior to the close of business on March 1, 2010. The notes are convertible into, in the aggregate, 27,027,027 shares of common stock. The warrants are immediately exercisable for 14,864,883 shares of common stock at an exercise price of $1.36 per share. The warrants will expire on March 15, 2010. The holders of the notes have the right to require the Company to repurchase the notes with cash payments up the occurrence of specified "events of default" and "repurchase events." The investors also have the right to participate in future financings undertaken by the Company prior to March 16, 2005, subject to certain exceptions. In connection with issuance of the notes and warrants, the Company entered into registration rights agreements with the investors pursuant to which the Company agreed to file a Registration Statement under the Securities Act of 1933, registering for resale the shares of common stock issuable upon the conversion of the notes or exercise of the warrants.

On August 19, 2005 holders of the notes began converting their notes into common shares of Insmed stock. As of September 30, 2005 $10,824,000 of convertible debt has been converted into 8,358,301 shares resulting in an accelerated amount of discounts of approximately $4.5 million.

So, of those 27,027,027 shares bond investors already converted 8,358,301. At that date there were still 27,027,027 - 8,358,301= 18,668,726 shares to be converted from notes outstanding.

Then, on January 13th, 2006, we got this:

«Between December 28, 2005 and January 12, 2006, Insmed Incorporated received notices from holders of its 5.5% Convertible Notes due 2008 - 2010 electing to voluntarily convert $1,250,000 principal amount of Convertible Notes into 965,250 shares of common stock at the conversion rate of one share of common stock for each $1.295 in principal amount of the Convertible Notes. The Company also received $5,831,794 from warrant exercises that resulted in 4,192,768 shares of common stock being issued. 370,370 shares were issued at an exercise price of $1.71 and 3,822,398 shares were issued at an exercise price of $1.36»

So, at this time we had 18,668,726 - 965,250 = 17,703,476 shares to be converted. And, from those convertible warrants we had 14,864,883 - 4,192,768 = 10,672,115.

But, on January 24 we got more of the same, bond holders converting notes and warrants into common stock:

«Between January 17, 2006 and January 24, 2006, Insmed Incorporated received notices from holders of its 5.5% Convertible Notes due 2008 - 2010 electing to voluntarily convert $4,175,000 principal amount of Convertible Notes into 3,223,927 shares of common stock at the conversion rate of one share of common stock for each $1.295 in principal amount of the Convertible Notes. The Company also received $3,310,735 from warrant exercises that resulted in 2,434,364 shares of common stock being issued at an exercise price of $1.36.»

So, from notes we still have 17,703,476-3,223,927 = 14,479,549 shares. From warrants we still have 10,672,115 - 2,434,364 = 8,237,751.

I believe the share count now is about 54.43 million + 10.82 million = 65.25 million, so the market cap is something like $166.39M.

These bond holders can convert notes at $1.295 and warrants at $1.36, so they see the current $2.55 stock price as a good deal. If they didn't convert, they would see their investment yield about 27.5% in profits until 2010. This way they're making about 92% in profits. In these bond investors heads, they don't see the company's potential, just that they were to get 27.5% profits and now they have 92% profits.

They don't have any interest to convert at prices below $1.70. And insiders also exercised options at $1.43 just before iPlex was FDA approved.

I've listened to the last conference call from the company, but they didn't said much, just that they're expecting to start commercialization of iPlex on the second quarter of 2006 and they will share details over the next conference call, when they present and discuss full year results with analysts.

In sum, I think the current weakness on INSM shares is due to bond holders converting notes and warrants into common shares and selling them in the open market for a superior profit. If the price goes down from current levels they will stop converting and there won't be so much selling pressure. The market still needs to absorb about 22.7 million shares before these guys are out of the way.

This can be done in a few days if we get positive follow through at next conference call.

I believe INSM has some problems from the past (some litigation issues also), but the future is bright. The company has never been so close to profitability as it is now. Analysts expect 2006 revenues of $7.84M against $130K in 2005.

I think we'll see $4.28 before the second quarter ends and I'll take profits around that level.

They don't have any interest to convert at prices below $1.70. And insiders also exercised options at $1.43 just before iPlex was FDA approved.

Hi David.  Please tell me the $1.70 should be $2.70 and I'll sleep better tonight.

Have a GRRRRRREAT DAY !!!!!

Hi David,

Thank you for the detailed analysis. Perhaps I am being somewhat naive, but here is what I see: you short sell REDF (they got $600M in market cap and $14.5M in sales) and yet you hold long INSM (their cap is $160M and projected revenue is ~$8M). The ratios are very small if one takes revenue/cap. And now we see the bond holders pull back from INSM, why? If the future is bright, can they wait the 3 months and cash out then (together with us!)?
Cheers.

Why is their projected revenue only 8million? Is that for this quarter only?  The drug that got FDA approved is for a possible $400 million sales market - isn't it? Of course, they will share the market with TRCA.