SOMX - Somaxon Pharmaceuticals, Inc.

[DMDBruce]

I don't think Friday was JUST profit taking-I had placed a stop on 75% of my shares at a price of almost one dollar below the opening Friday price because I had several appointments to attend--When I returned the stop had been hit-My point is that I believe there was some profit taking, but most of the fall in share price was the result of the mm needing more shares to sell to bigger clients so the price was driven down to hit stops and to acquire shares from people who panic sold

One thing that I have learned in trading pharmaceutical/biotech stocks is that the management of these companies are not able to plan for the future contingency of what if there research proves out--They very often have insufficient funds for continued research, they haven't even thought about possible future partnerships, distribution, marketing sales etc--For people so bright they unfortunately demonstrate a lack of business acumen and planning

[maritska]

I got back in again today after the ride in november-december. With all the comments about a take-over or partnership and even higher prices pps I thought...why not, let's try again.
Where can I find the new resistance lines?

[DMDBruce]

SOMX has tremendous upside-based upon its low number of shares and the niche of the pharmaceutical market that they are in--The question remains as to how skilled their management team is in navigating the waters to possible partnership and distribution agreements--they have not as yet demonstrated this ability-finally how interested are they in rewarding loyal longtime shareholders to the max

[maritska]

And everytime I buy, the stock drops...

[BTKbuyer]

Big news after the close....SOMX doing a secondary....

4mm shares....around $8 that's 32mm in proceeds. Increases their cash reserves 8 fold and gives them what they need most....time to explore their options.

I believe this will also give them the bargaining power to attract a partner or buyer on their terms. Before the secondary, they were cash strapped and had limited time. Now that is not the case.

Of course should they not be able to locate the right deal, they can try to go it alone with this cash, but I still don't think that's best option by a long shot. But at least this shows its a possiblity.

Despite the dilution this is positive IMO for SOMX. It gives them the time and flexibility they need to get a great return on your investment.

[newguy]

(DDT, you may also copy this post to the Q2 Plays thread if you think it is relevant there.)

struftepete's Instablog -- Seeking Alpha

The blogger quotes and comments on excerpts from the annual report.

The parts of the blog entry that I found most interesting:

There is a whole lot of outstanding options and warrants that are now exercisable within 60 days of March 18, 2010,

This timing was triggered by the latest events. By May 18, 2010 we should be close to the date of the next annual meeting and it should give enough time to come to conclusions with one of the potential suitors.

Over more, we have seen that there is also a shuffling of the Beneficial Shareholders:

Boxer Capital, LLC and Millennium Management, LLC are back as share holders and Montreux Equity Partners LLC, is partially out. As from today I calculated that the complete group of venture capitalist is holding 53.5% of the current beneficial shares and most probably the new offering of 4 to 4.6 million shares will also go to these or other venture capitalist. It is my opinion that these venture capitalists as a group will be most seduced towards a buy-out.

And as Somaxon Management wrote themselves in that latest annual report:

“As a result, these stockholders, acting together, would be able to control all matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other business combination transactions”

(Also, the stock seems to be up in pre-market.)

[maritska]

Mar 25, 2010 (Close-Up Media via COMTEX) --
Somaxon Pharmaceuticals, Inc. has announced that it is offering to sell up to 4,000,000 shares of its common stock in an underwritten public offering.

I'm a Dutch amateur so can anybody explain in normal words what this means? Does this lower the price per share? Or are these shares offered at, well let's say, 8,90 per share?

[newguy]

'Dag, Hallo,

I am an Israeli amateur who loves and misses Amsterdam.

My long answer:

As far as I understand it, the new shares will be sold at whatever price the market is willing to pay for them.

Such a dillution would normally cause a proportional discount in the stock price. However, in this particular case, for reasons discussed in the "Second Quarter Plays" thread, the investors may possibly see this secondary offering as a good thing (and expect yet another huge spike on dramatic news before July), so we may possibly be spared the big dip. I hope this is correct...

My short answer:

I have no idea how the stock will behave - sorry!

[maritska]

Hallo Newguy!

Offcourse you miss Amsterdam and Holland, it's a very nice country with lots of nice people and beautiful blond women.

You made it clear, it can go either way. Now I understand dank je wel!

[maritska]

9,06 after hours.....don't think it'll jump up today.