- Financiers hold Company hostage
- CEO steps up to prevent dilution and save lives
- Samsung production schedule saved
- Short and distort articles flood social media
Over the weekend the shorts have been attacking CytoDyn (CYDY) on social media and the message boards, sowing the seeds of doubt that something is majorly wrong with the company. The tactics they are using are hitting at the core belief system of investors. The lack of information and understanding of what certain SEC filings mean is part of their game to profit and steal money out of the hands of loyal investors. This article will set the record straight and provide shareholders with undistorted truth and analysis of the situation.
The Shareholder Con
1. Makes you believe there is a massive CEO pump and dump with flimsy claims.
2. Makes some long time supporters look like fools calling the SEC documents “fake news”
3. Provide proof of SEC filings – shocking all.
4. Generates follow up articles explaining their theory and caution to investors.
It all started with an Adam Feuerstein retweet after the bell Friday night warning shareholders that Nader Pourhassan, the CEO of Cytodyn, was selling a massive stake in the company. (Less than 1%)
The tweet from Jacob Ma-Weaver was retweeted by the same guy that leaked an “Early peek at data on Gilead coronavirus drug suggest patients are responding to treatment”, which caused a substantial runup in the stock price, and resulted in a massive windfall for option speculators called out by a hedge fund manager Tian Zeng. A detailed account of this heist is well documented by Information Liberation.
Yet on the same day, Gilead’s management cautioned that the trial wasn’t even close to be completed — and that the leak was a tiny portion of a giant 6,000 person non-randomized trial that has yet to be released. Just one mere week after Feuerstein touted Gilead’s COVID-19 drug, on April 23rd, the ultimate hypocrisy was announced as STAT and STAT’s biotech reporter, Adam Feuerstein, published an article that there is in fact no benefit for coronavirus patients from this study after all. The GILD “flip flop” has cost investors billions, and the truth of this is well documented so anything that Adam Feuerstein endorses should be looked at extremely critically as a potential con. In fact Feuerstein’s actions were so egregious he sparked congressional ire from House Democrat Lloyd Doggett who called for an SEC investigation. Doggett, who is an attorney was quoted “providing information that’s designed to impact the stock market is not something that is permitted under federal securities law.” But the Gilead con is not the only substantial con in recent weeks.
The Actors Behind the CytoDyn Stock Con
A number of months ago (February), Culper research, an anonymous research firm with no credentials and an IP address in Bulgaria, published a short thesis on CytoDyn. They started their con off with a character assassination on CytoDyn’s CEO, calling him a convicted felon. This firm has had one of the worst track records with an average loss of 40% on its predictions and analysis. It’s a mystery how any investor can take their research seriously.
Simultaneously, another short-selling entity, Utopian Capital, published a quite unconvincing and underwhelming short-selling article as CytoDyn shares soared to $1.50 from its December lows of $0.29. Utopian Capital then published another desperate short report in April when they were heavily underwater in their short position. This report attempted to mislead investors on a scientific basis. It claimed that:
“Clearly, in our opinion, CCR5 is NOT a viable drug target for COVID-19 treatment, as it is being touted by CYDY. This review clearly underscores the inefficacy of Leronlimab against COVID-19 with possibilities of worsening of cytokine storm.”
Based on CytoDyn’s recent coronavirus results, all investors realized that this was a complete and utter sham of a report, simply designed to shake new investors to the core that the science wasn’t real. Follow-on reports “Debunked the short thesis” and gave a detailed explanation and flaws to the short sellers’ logic.
Enter Adam Feuerstein, Again
No short-selling scam would be complete without Adam Feuerstein. Adam Feuerstein is a self-proclaimed journalist and one of the most feared biotech analysts that actually does very little to no analysis. If investors are curious, an in-depth report of his tactics was published a couple of years ago that explains how despite his large twitter following he has become irrelevant, as his recent game with GILD should confirm. In two years since the report was published, his Twitter following had only increased 9% annually—a truly timeless report uncovering the tactics he uses to discredit biotech companies.
The important thing to notice is that these shorts have little to no following, and Adam Feuerstein is called in only when the shorts are at their breaking point, as evidenced by Utopian Capital being massively underwater in their short position with the CYDY shares moving up week after week. Any shareholder selling Monday will become a victim to one of the biggest cons in biotech, perpetrated by the self-professed “Night King of Biotech.” In all likelihood, this con will approach $10 billion because it has become clear from the $10 billion movements in GILD’s market capitalization that a COVID-19 treatment is worth about that much. Investors should thank Adam Feuerstein for his great research because a $10 billion market capitalization puts a ~$20 price target on CYDY stock.
The Next Short Attack is Coming – Monday
The shorts have attacked the character of the CEO, the excessive news flow deemed promotional, the science behind it, and next on their list are results. As an investor you need to be prepared for the Short and Distort twitter release coming on Monday, provided the company announces their long awaited Journal Article detailing phenomenal peer reviewed coronavirus results. Following their cookie cutter approach pattern, the shorts will most likely attempt to hijack CytoDyn’s message during premarket trading hours. They will come out with an article that talks about the patients and how some of them have been paid to give testimony. In fact, years ago about 7 patients on leronlimab for HIV treatment did video testimonies about how great PRO 140 (leronlimab) was in treating their HIV. The shorts attacked this as paid advertising. If you follow their playbook, the next thing will be class action lawsuits or a focus on the existing lawsuit filed April 24th, between the Ex Chairman of CytoDyn Anthony Caracciolo who used to was an SVP at GILD, yet couldn’t get a licensing deal done for shareholders during his tenure. Wait… shorts already played that card on Friday when they announced “CytoDyn Executives Sued for ‘Oversized’ Stock Awards.’” The main takeaway is that the shorts are on a timer (due to having to pay interest on lended shares) and therefore they prey on the weak stockholders and will try to do anything necessary to make stockholders sell. So make sure you share this article with all investors you know. With truth and information, short-and-distorters can be defeated.
The Big Reveal – REAL or FAKE?
This Form 144 filing is in fact very real. What it indicates is that CytoDyn CEO Dr. Pourhassan exercised 11 years of options cashlessly, which resulted in a sale of shares (as in, past tense) on April 30, of 4,821,174 shares at an approximate price of $3.25. It doesn’t mean Pourhassan is filing to sell—it means this is a done deal, period. It’s in the history books and there is NO OVERHANG from this transaction. So the next question is: WHY WOULD HE DO THIS!? The shorts would have to believe that all insider selling is bad, but the reality is that insiders sell for a variety of reasons and it’s a mixed bag when it comes to figuring out their motives. However, in this case, it’s very transparent. No one on the planet would be so stupid to sell right before a major announcement, giving up a tremendous amount of potential profit unless they literally had a gun to their head. In the next section you will learn that there was in fact a proverbial gun to CytoDyn’s head, motivated by greed, and Dr. Pouhassan wasn’t going to sit back and watch people die. If Dr. Pourhassan is guilty of anything he is going to be convicted of saving tens of thousands of lives for his heroic actions in a time of governmental inaction.
On April 30th, the same day Samsung was due the final payment under the $30 million in purchase orders, Pourhassan sold his shares. The message boards are flooded with many theories, but the consistent theme is likely the truth. Samsung’s payment was due to be funded by the same financier that did the last round of financing above market. The rumors indicate it was scuttled by a look back provision in a prior contract that was dilutive. Sources have explained that the company was being held hostage for a sizable block of shares that would have put undue pressure on the price. Based on history, it’s likely that pressure is coming from the same seller out of Chicago who put pressure on CYDY shares the first time it hit $1.50, which corresponded with the Culper report. There is clearly an internal leak at this shop in Chicago and Pourhassan’s financing could create a massive short squeeze if the shareholders don’t freak out like many have been witnessing on the message boards this weekend.
With Samsung production secured, the company can now focus on beating up the government to take action. The company indicated that 1.2 million vials would be ordered this year in anticipation of the demand.
Anatomy of the Financing – Follow the Money
The first part of the transaction is raising money via cashless options exercises and shares. It is worth noting that these options had well over 5 years of life in them. So the question of why the CEO of CytoDyn would exercise these all at once (11 years worth) is definitely going to raise an eyebrow with investors. There are also massive tax implications that need to be paid immediately during an exercise. Even the shorts would agree, you have to “FOLLOW THE MONEY.”
So here’s what happened: after the cashless exercise, the $15,670,668 pot gets whacked up into pieces. Thanks to the options exercise, Pourhassan is put in the top tax bracket with a 37% income tax on both the cashless options and the warrants. The options exercised at roughly a $.73 strike price generated about $3.52 million for CytoDyn. The additional 4 million CEO options and warrants also brought in another $2.52 million for CytoDyn. This meant over $6.0 million to CYDY and less than $2.9 million to Pourhassan. The number due to Pourhassan is likely smaller because the analysis does not factor in the cashless exercise. These quick funds into CYDY allowed them to keep Samsung production on track in accordance with their primary mission to save peoples lives.
Journal Report Delay
The conference call on Friday May 1st was supposed to report 11 patients from the Montefiore Medical Center and the discovery that COVID-19 is a RANTES (CCL5) driven disease. It was clearly delayed, providing shorts an opportunity to strike; otherwise, all the buzz this weekend would be focused on the great clinical results. As Dr. Lelazari stated in a Kron4 interview “nobody is too ill, we’ve the sickest of the sick, on death’s door, turn around.” He was referring to 4 of 11 compassionate use patients that survived and were under an emergency use IND which had ZERO exclusion criteria. These people failed to respond to remdesivir and hydroxychloroquine administration. So after the journal report is released, people are going to be asking, “why wouldn’t a drug that can potentially save 35% of coronavirus patients with ‘no hope’ immediately be approved and used to save lives?” As evidenced by Gilead’s share price response, a coronavirus treatment as efficacious as leronlimab could be worth more than $10 billion.
Remdesivir Still Under Fire
Many are still very skeptical of remdesivir, even the top doc. The announcement by Fauci to push forward with remdesivir was due in part to the leaks of partial information. This was due to Adam Feuerstein’s reckless reporting. So now thanks to Adam, sick people are at risk of taking a drug with notable side effects. In CYDY’s last investor call, Dr. Patterson explained that leronlimab doesn’t need to be paired with remdesivir and CytoDyn would likely turn down a partnership with Gilead or another company with an antiviral because combination therapy could possibly taint the pristine safety profile of leronlimab.
Dr. Pourhassan is a national hero, not a villain. His motivation was to save lives and prevent shareholder dilution. In fact, his selfless insider sales are tantamount to a $15.0+ million bet that this drug works and is going to be approved in short order. Additionally, he has been caught on record alongside Dr. Jay Lalezari saying “sometimes things are not always about money.” His sacrifices and move to pay Samsung on time have ensured the availability of leronlimab to Americans sick with coronavirus and in risk of death. He sold shares the day before an expected massive announcement.
All the press on Gilead and remdesivir has crowded out news of a life saving drug. Cytodyn should be on the podium, not Gilead and their remdesivir with all its shortcomings. Monday is the shorts’ last stand. We hope that this article gives you a new perspective into what the truth is, so you can make a truly informed decision instead of being conned by short sellers and Adam Feuerstein.
Thanks Pat. The article lines up with the options/shares (4.8 million) shown on the form 144. Where are you getting the information on the additional 4 million warrants? No filings on those yet? Seems the total (8.8 million) would exceed all stock that NP controls?
Excellent write up
Terrible short scams
Should go.to jail ..manipulation and fraud
Pat – this is an incredibly well written article. Well sourced, deep understanding of the history and arguments (long and short). Who are you? What are your credentials? Investor, doctor, shareholder, reporter? We all deserve to know, and it will help with accepting your hypothesis. Thanks!
Best explanation of the Short & Distort mafia and a clear point by point refutation if the short arguments.
Sir Monarch – kudos to you for your timely deliver of this analysis. I was so mad in Thursday, I started writing every politician and health organization I could. The truth, and science, will out. Thank you.
What an amazing piece! thanks for your exhaustive research on all the complexities involved in CYDY currently. So sad that anyone would work to take down such an kind man and the other hard working professionals working on this wonderful therapy.
Thanks for the article. Stock manipulators should be jailed.