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Wednesday, August 3, 2011

fyi... holiday, Oil and DNDN

1. I'll be on holiday until 08/12. I will bring my phone, and hopefully will continue to post via tumblr (shit happens link). (So long as the wifey lets me :)

2. Cramer mentioned the decline in Oil today for the reason we rallied.

If he can sit there, and lecture about a one-day move in oil prices and how significant it is, then why in the world is no one talking more about the stimulus effect of the new MPG (miles per gallon) requirements?!? There is basically going to be a stimulus of over $1.7T due to this measure, and it is basically ignored. If we were to assume this to be annualized evenly over the course of the 14years, its about $120B a year back to the consumer and the economy. That's huge, and completely ignored by the Doomsday schmucks.

3. DNDN - ouch. The stock is down over 60% because of tempered expectations.  They missed Revenue estimates by $10M, and guided fairly poorly. For a $93,000 treatment, I can see how reimbursement confusion can cause slow adoption, but that is why they have a marketing/sales team. To remove that confusion.

But to add to the confusion, there are mixed signals. Lower revenue expectations, yet "strong physician interest in Provenge" with an increased number of accounts (more than 300 by end of July) infusing Provenge.

I do not know what to believe right now, but if this is just a temporary hick-up the lay-offs should not be necessary.  These contradictions have caused the market to be very harsh with the stock.

Listening to the conference call, management answered the questions with solid patient numbers, and management's story seems to 'stick'.  Looks like they just handled this pretty poorly. They wanted to seem tough on expenses, but just created more confusion which beat the hell out of the stock.

Management should have just said they are removing guidance as payment confusion has caused low visibility toward Provenge.  Why include all the harsh language? Management needs to get their shit together, and their marketing/sales team in line.

Seems like an opportunity here, but its now a 'show me' story.

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