After a “run on the fund,” triggered when people figured out it was loaded up with crappy illiquid assets.
By Nick Corbishley, for WOLF STREET:
Hundreds of thousands of investors trapped in the imploded and shuttered Woodford Equity Income (WEI) fund, which is now down to £3.1 billion, could lose a third or more of their remaining investment by the time the fund is wound up, according to an analysis commissioned by the fund’s administrator Link Fund Solutions.
In a base case scenario modeled by private equity specialists PJT Park Hill last month, losses could reach 32.5% of total funds as the fund is liquidated. Under the worst-case scenario, the fund’s value would fall by 42.6%.
In other words, the fund’s investors could collectively lose between £1 billion and £1.3 billion of their remaining funds. This would be on top of the losses they already suffered in the years preceding the gating of the fund five months ago. Between 2015 and June 2019, when the fund was shuttered, the total amount under management at WEI shrank by almost two thirds, from £10.2 billion to £3.1 billion, as its portfolio has unwound dramatically.
As an “open-end” mutual fund, WEI had to sell some of its assets each time an investor asked to redeem their funds, which they could do at just about any time. This is not a problem when the assets in question are highly liquid, such as large-cap stocks. But when the assets are bonds, loans, real estate, large positions of thinly traded small-cap stocks, or unlisted shares that can take days, weeks or even months to sell, there is a mismatch in liquidity between what the fund offers to its investors (daily liquidity) and what the fund holds (largely illiquid assets). A “run on the fund” can be catastrophic for this type of fund, one of the oft-undisclosed risks of investing in open-end mutual funds.
In the case of Woodford, his specialty was small-cap stocks and holdings of unlisted start-ups in the tech or biotech sectors — assets that can take a long time to offload. When, at the beginning of June, Kent County Council, a longstanding backer of Woodford, requested the return of approximately £250 million, there was no way he could sell assets quickly enough to redeem the funds. Instead, he placed a ban on redemptions, meaning that investors who hadn’t already yanked out their money, including Kent County Council, were trapped. Now, they stand to lose as much as 42% of their money.
By EU law, equity funds like Woodford’s are allowed to hold a maximum of 10% of their portfolio in transferable securities that are not traded in an “eligible market” such as the FTSE 250. To circumvent this rule, Woodford bundled up his fund’s most illiquid unlisted assets and listed them on the minuscule Guernsey-headquartered International Stock Exchange, which despite its impressive-sounding name has barely any trading activity at all. This was enough to lend his most illiquid assets the appearance of liquidity.
Many of those bets went bad, resulting in huge losses, which in turn triggered a cascade of redemptions as the sharpest investors — those that keep a close eye on the markets and the asset classes that the open-end fund is invested in — began pulling out their money.
In October, Neil Woodford resigned as manager of Woodford Investment Management, just days after Link announced its decision to wind up his flagship fund, WEI. The task of overseeing the sale of the fund’s holdings was awarded to BlackRock, which will offload the lion’s share of the fund’s quoted stocks, and PJT Park Hill, which has been tasked with the much more difficult job of selling unquoted companies and listed but hard-to-trade small companies, before making a first pay out to investors in January.
Investors could end up receiving a lot less than they had hoped, according to PJT Park Hill. The NY-based investment bank based its analysis on the assumption that the only assets they or BlackRock will be able to sell at market price are the most liquid FTSE 100 stocks. For most of the remaining portfolio, they will have little choice but to accept a discounted price as they offload the fund’s stocks.
The sharpest discounts are expected to come from the sales of the fund’s “unquoted and listed, but hard-to-trade, technology stocks.” Even Woodford himself had been anticipating problems in this area of the portfolio. His worse-case scenario for the fund assumed that some of these unquoted stocks would be written down to zero.
Yet despite that, Woodford still expected the average discount on sales to be no more than 3%. But that was before taking into consideration the recent rout in the shares of a number of the fund’s key holdings, as investors priced in the manager’s exit. Many of the times Woodford tried to offload one of his more liquid assets, hedge funds would be one step ahead, mercilessly shorting the listed stock before it was sold. As WOLF STREET reported in August, many of WEI’s largest investments, from its holdings of cold fusion developer Industrial Heat to its shares in litigation funding specialist Burford Capital, had plunged by between 30% and 70% YTD.
Now, thanks to the leaked results of PJT Park Hill’s modeling, we know that 23% of Woodford Equity Income’s portfolio is still held in illiquid stocks, down from 32% at the time of suspension. Link estimates that these “assets” will take anywhere between 181 and 365 days or more to offload. In other words, it could take as long as a year for investors to receive their full payout.
UK market regulators, once again, were found wanting, reacting to events once they’d happened rather than anticipating them or taking action to preempt them. They couldn’t, or chose not to, prevent Woodford from raking in more than £8 million in management fees from the investors stuck in his toxic fund.
By the time the dust has finally settled from the Woodford scandal, hundreds of thousands of those clients, many of them retail investors, will have lost a large chunk of their savings. The reverberations are already being felt across the industry, as investors begin asking themselves just how safe it is to entrust their savings with active fund managers that may have similar liquidity mismatches to Woodford’s. By Nick Corbishley, for WOLF STREET.
Russian billionaire rues the day he bought it. “We should have been more cautious and done our due diligence better.” Read… Months After Takeover, European Supermarket Giant Dia Discloses Huge Losses, Plunging Revenues, Soaring Debt
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By the time the dust has finally settled from the Woodford scandal, hundreds of thousands of those clients, many of them retail investors, will have lost a large chunk of their savings.
The good news is, these bilked retail investor muppets might be red-pilled enough to see what a fraud and scam western financial systems have become, and might be motivated to start fighting back against a corrupt, captured system.
optimism, good for you
One more point, the current, ongoing “Federal” Reserve aid to the participants in the “repo” market are more hidden aid to the financiers. Which entity is legally insolvent, i.e., unable to meet its current liabilities with its assets, so that it need the “Federal” Reserve to user US tax payers’ legal tender to give that insolvent entity a bailout? As with the prior bail outs, we will only find out many, many years in the future. See https://www.wsj.com/articles/new-york-fed-pumps-in-104-293-billion-in-temporary-liquidity-11573744698
Keep in mind that the largest banks’ capital (such as it is, because much of their capital has a mark to market value much less than shown in their disclosures of capital) ranges from around $60 billion to $250 billion. See https://www.youtube.com/watch?v=GFkkN2M3Y3c. Thus, one or more of the largest banks may be legally insolvent, if the “Federal” Reserve is sticking to its announced mandate to protect the banking system, i.e., the too-big-to-fail banks.
See also https://www.aljazeera.com/investigations/theoligarchs/
Let’s see he was well diversified.
His portfolio was no worse than owning “Unicorns” in the USA
He had pre-IPO startup’s that are not liquid, the stuff that WOLF is always telling us why the rich are so lucky, cuz they get access to this trash.
The guy’s only FAILING I can see is that he didn’t sell;
Your supposed to hold your winners and sell your losers.
This guy was old-school, but no worse than his generation, thus IMHO there’s probably 100’s more in the UK just like this one, but they haven’t had a run yet.
OlYeller,
These kinds of illiquid investments should never be offered in an open-end mutual fund due to the liquidity mismatch. I have been railing against open-end mutual funds for bonds and loans for years. They can turn toxic when there is a run on the fund. This is totally independent of the guy’s skill as investment picker.
But here is the thing: this guy is a pro. He knew about the liquidity mismatch. He knew what he was doing, which is recklessly gambling that there would not be a run on the fund, and the gamble blew up. He did that gamble with other people’s retirement money*.
*Note, it’s not illegal to blow up other people’s retirement money with reckless bets if you dot all the i’s and cross all the t’s.
But here is the thing: this guy is a pro.
From the look of him: The kind of pro that They used to send round to take off dead-beat’s fingers with garden shears, and now have moved on & up to better things, all civilised like :)
Gotta watch ‘Layer Cake’ again, I think.
After reading these types of articles I realized one of my biggest mistakes in life was going into a career of physics instead of finance. Finance didn’t make any sense to me at the time. It still doesn’t make sense, but now I understand it largely thanks to Wolfstreet.
Haha – No, They will blame ‘Brussels red-tape and bureaucracy’ and vote Tory for more deregulation!
It would not come as a surprise if it is later revealed that the Woodford funds also donated to the Tory party, in return getting ministers to keep the regulators off their back.
Ripping off the UK population has become like dropping a fragmentation grenade in the garden pond, no need for barrels, aiming, shooting and stuff!
Hard to feel much sympathy for people who invest in things they don’t understand. Caveat emptor is the first rule in investment. You can’t trust a government agency to protect you, crooks are clever.
Its never going to happen, when you have 80% of the population stealing from the other 100% of the population, the 80% love how things are going.
The 20% will have to stand up like all the past revolutions where 15% stood up fought and won. But living in a police state the 20% are to scared to fight, you will be in prison and on the news as white supremacist.
So you see it will never happen!
The only hope we have is everything collapses.
Jon Corzine laughs at these amateurs.
“Guernsey-headquartered International Stock Exchange, which despite its impressive-sounding name has barely any trading activity at all. This was enough to lend his most illiquid assets the appearance of liquidity.”
All Corzine’s fund holders did receive 100% of their money back, he paid a 5 million dollar fine, and he’s back in business with a new fund.
Cool fake news bro.
Jon Corzine, largest “bundler” for hope and change, never feared jail.
“Under his watch, the firm imploded with nearly $1 billion of customer money missing, resulting in one of history’s largest bankruptcies.”
https://www.foxbusiness.com/markets/jon-corzines-hedge-fund-get-chilly-reception-from-investors
Define ‘fake’ news. In fact, there is a new fund. The new fund raised much less than the target. Previous investors in MF Global have been compensated for the misdirected funds that caused the insolvency of MF Global.
Try reading your own link.
All Corzine’s fund holders did receive 100% of their money back, he paid a 5 million dollar fine, and he’s back in business with a new fund.
This is not lauding Corzine or his practices; it’s just a comment about actual events.
Great series Nick – thanks
I wonder is there regulation there related to where/how/amounts Councils (municipalities) can invest/park their money? Seems to me a Council has fiduciary duty related to public funds and foreseeable risk.
Given the “eligible market” requirement it looks like more due diligence is required by these public entities, and others, as this experience, and, your and Wolf’s articles make clear.
On a personal note, I understand the “liquidity mismatch” situation. Years ago I found and purchased options only to see the next day my trade was the total open interest for the strike and duration, which continued until expiry – never made that mistake again. The algo always responded with a bid 50% of my limit sell :)
UK government waste (locally and nationally) is at epidemic levels and nobody cares about the odd quarter-billion “here or there”. A crappy railway line is being built from London to Manchester, not due until 2026, and it is already at least $50b over budget.
County and city authorities in the UK are into all kinds of unsafe practices these days, including real estate speculation, owning shopping malls, etc, having been starved of funds by central government.
Here one of the UK’s so-called ‘growth hubs’) the city is building a luxury hotel on a former car park!
Just like unsafe sex, it all has the potential to unravel most unpleasantly…….
Such desperation for pension funds to find any gains, I wonder how many are now broke, busted, illiquid, sinking to see the titanic…
Due to buying into some of these Equity funds
There is a similar thing that happens in 401Ks. Often you are given a choice of funds to pick from. One of them may underperform for 2-3 years because the investing style is out of favor. Administrator decides its a bad fund. You will get a notice that your funds are going to be moved to a new fund as the old fund is being dropped. It can be a forced sell at the bottom. Happened to me once on a small cap fund that was way down. It really hurt.
It really hurt.
It happens so regularly you have to wonder if it’s by design, although the ‘regulators’ seem fine with it. But then, they’re fine with everything, so regularly you have to wonder if that, too, is by design.
Probably you’re aware that the 401k thing was a scam designed to screw employees (by the millions) by transferring pension funding to Wall St. It’s what started the US equity markets on their upwards trajectory, and it’s only gotten worse for wage slaves ever since.
I think there is truth in what you are saying. I heard a financial radio person say that since 2000 stock market return has been 5.6%, but average for people managing their own money was 1.9%. That spread went mostly into wall street and hedge funds pockets.
Same story in Europe with managed pension insurance plans etc.
I had several plans that promised unrealistic returns in the nineties (like all of them did, I didn’t really understand then), like 8-10% yoy returns and ultimately huge payouts. After many years I discovered that the capital in the accounts was actually shrinking and not growing, because returns were way smaller than projected and on top of that the managers took 3-4% every year for themselves. So I stopped paying and took what remained, often less than 1% of what they had promised. I would have done much better keeping all the money in a savings account (and paying taxes on that every year). There have been legal battles about these scams for years, but politics shields the pension insurance companies from harmful claims, they simply get away with it.
It’s different for government pension plans, although there have been few pension increases lately but real cuts are still the exception. This year too it seems like cuts will be avoided thanks to the recent stock market rally and some political engineering to make it seem like the pension funds have enough capital for future promises. But in reality their situation is probably not much better than with the private pension insurance plans, it’s just that politics can pretend for a bit longer that everything is fine, so that the young generation keeps giving their pension money to wealthy former government employees.
One stock market crash and people will wake up to the ugly reality, that’s why ECB is hell bent to continue asset inflation.
I think that 401k’s were originated to shelter taxable income for C-suite executives – a handout from Congress. Eventually it trickled down to the employee-class via corporations that found it more convenient (less costly) than a pension fund as an employee benefit.
The 401K was designed to pool large amounts of wealth where it could be easily taxed or confiscated if need be. I first saw reports on the topic back in the 1980’s. Even the name 401K is the section of the tax code where the plan is defined.
It was sold as an investment that would be taxed at low rates in retirement. Now if you get money from a 401K you pay more for medicare and your social security may also be subject to more tax.
UK market regulators, once again, were found wanting
Where were they found? In a bunker on the 14th hole? And what exactly is it they want, since they were ‘found wanting’?
We got out of the financial markets completely when it became all too obvious that securities fraud had been legalised.
Am I being retro about this, or paleo? The definitions seem a bit nebulous.
look at this Ken Fisher guy also in the news…….~$70bn in pension assets, perennially under-performed. Perennially! And buy more than 1%. He’d attend those pseudo intellectual investment conferences and wax poetic, that’s how big his head had gotten. The rub was, notable names like “Goldman” would carry his funds too! Recommending him! The buy side corruption is out of this world, and nasty. Who knows what really was going on, perhaps ken fisher was playing “muppet” so that his other members of the eco system (like Goldman) could profit. Who is to say? Not the SEC, for sure.
Fisher does ok, if you study the hedge funds in their entirety, he’s way better than most, and has a track record.
Of course Jim Simon is #1, study him, Dalio is also down, but so what? Overall Dalio has beat that system 25+ years just like Simon. Fisher has done nearly as well as Simon, the Einstein of the stock-market.
There are some real losers out there, but Fisher is not one of them.
..
https://hedgefollow.com/funds/Fisher+Asset+Management
Fisher is top 5% of all the hedge-funds he’s one of the few that stay’s on top of all the dogs
The guys genius like JP-Tudor, why do people post misinformation on Wolfs site?
Fisher, Goldman Sachs, George Soros are the usual villains. Notice any pattern here? No one mentions someone like Charles Koch, though. How much environmental and political destruction has he wrought???
There’s this idea, and the EU is very hot about it, that increasing regulation will allow to do away with accountability.
Every year brings new modules to fill even for something as mundane as company car insurance but, intriguingly enough, this doesn’t result into increased coverage, faster damage repayment or lower premiums. Just more wasted time, more dead trees (aren’t we supposed to be eco-friendly or something?) and I am sure nobody is going to read those modules.
Personally I believe that existing laws are perfectly adequate: just use them instead of just teaching them in law school and then forgetting about them. If WEI customers believe the fund managers have cheated them and not fulfilled their contractual obligations, let them go to court.
IF WEI fund managers are found guilty apply the existing penalties (nobody likes going to jail or having his beachside villa confiscated), but if WEI customers blindly signed the dotted line without reading the contract (or having their solicitors do so) it’s buyer beware, sorry.
A lot of regulation gives us a false sense of security. I read that in less regulated times stocks had a higher dividend payout than corporate bonds because they were recognized as being riskier. Now the dividend on sp500 is less than 10 year treasury.
Regulators and lawmakers are always fighting the last war, while the opponents are creating the next scam.
It was so much easier when ‘savings’ was a batch of dried meat in a corner of the cave…..
Right up until the rats got into it. Now they run around on two legs.
This Woodford guy is a high level criminal,no doubt. His Pre-meditated crime of engineering the liquidity mismatch and evading EU liqudity rules is on par with 2008 “Big Short” worthy shenanigans played with designing CDOs to fail. There must be other shenanigans as well, but who will uncover them? That’s why they want Brexit.
It’s more complicated that that.
Once upon a time Woodford probably did ok, back when the market was a ‘market’, now with negative rates (ZIRP, and NIRP) its a ponzi.
A few people like Dalio or Simon understand the game, cuz they don’t care about emotion, they use computers to minimize loss and maximize gain. Guys like Woodford were still doing the old Buffet, stock picking, you know valuation, and stuff. Like BUY&HOLD, nothing works anymore in the QE fiat2infinity ponzi scam.
…
CDO’s weren’t designed to FAIL, everybody thought it was an IMPOSSIBILITY to fail, and if you watch the movie, you’ll see that all the insurers refused to payout on the claims when it did fail. Everybody was selling insurance and pocketing the cash, when it did fail and a few ‘wise kids’ tried to collect their lotto-win, the big investment banks told them to get-lost. So they went public (Vegas MTG-CPA meeting), and finally got a little chump ‘walk-away money’ for their investment.
Jim Simons and Ray Dalio have dramatically different approaches. Simon was a mathematics prof. at MIT, Harvard and Stony Brook, did defense work in stats, probability and computer sci., then “retired” into stock investing. His approach is based on high level probability, stats and pattern identification, not fundamental, growth or momentum investing in the usual sense along the lines of Dalio.
Woodford is your classic case of “executive hubris”. Arrogant old man who felt invincible. He was lauded for years by the UK and US press as a financial god at Fid*lity. So, he quit, set up on his own, and thought everything he touched would turn to instant gold… But it didn’t… He then panicked and started all kinds of wacky schemes in micro-firms (like Guernsey), hoping they would multiply like wildfire from a low base… But they didn’t… And his “fund” (effectively) went bust.
Totally agree, he should see his day in court… But he won’t… He will avoid prosecution and retire a multimillionaire, while investors lose almost everything. UK financial authorities don’t care and they encourage reckless gambling, because they know it brings in the big bucks from abroad for London.
The Tulip Mania & South Sea Bubble clearly failed to teach any lessons when it came to investing in loony schemes; people cannot help themselves but it is, I admit , hard to recognise psychopathic Napoleons suffering from delusions of grandeur in any other field of human endeavour,let alone investment. And of course the guardians appointed to ensure that everything is above board seem to fail utterly without being ever taken to task. Quis custodiet ipsos custodes,? If you have the answer to that please post it up in a reply box.
So much financialization is riding on the economy that there are a high percentage of scams out there. I can’t even bring myself to place funds in an sp500 index anymore because I feel like I am just propagating the status quo of people at the top and boards making too much money. There are good CEO’s and boards out there but I have become much pickier about just giving my money to the financial system expecting the managers to put my needs first.
In a way the whole system is constructed the wrong way. A retirement plan should be about providing you an income stream for life. Since an individual doesn’t know how long he is going to live he has to use a conservative planning number like 95 or 100.
In the old days it was realized that you could pool money for a group and the life expectancy for the group was predictable. You could then guarantee an income by matching treasuries to the group’s life expectancy. This is pretty much all dead now as modern fiat money planning and NIRP has crushed those kind of plans. Pensions are now promising incomes based on stock market returns which might be OK if they were basing it only on dividend income, but not on price appreciation.
You have to turn the situation upside down and try to make sure you are not in a district, city or state that is obligated to pay for over promised, underfunded pension. I think the next ten years are when these are going to start blowing as I can’t see anyway pension returns are going to average 7% from here.
And prepare for lots of long-term and aggressive industrial action by unions when public sector pensions cannot be paid, or are drastically cut -another reason not to live in a major city.
The writing is very much on the wall for a generalised pensions collapse.
It’s actually very important who is in charge at the Federal level when the crisis comes, because a crisis will not go to waste. Just read yesterday an obvious thing I hadn’t thought of exactly: ‘Every government action results in winners and losers.’
It’s aggravating that many who comment on this site treat “Guberment” as the main problem. The fundamental problem is that politicians are decided on by oligarchs and corporate overlords. The power of lobbying comes from the efforts of Justice Lewis Powell set in motion in the 70s. He wanted big business to shut down the threat of socialism through unions.
Unions, imo, are the result of ravenous capitalists who used and abused the workers and found that employing people they can control through company stores, housing and wages, and could be gotten rid of instantly, was cheaper than slavery. Unions, as we’ve seen, became corrupt to a considerable extent.
But the government that people have come to hate is under the control of the campaign financiers, not voters, per se. Until lobbying and dramatic changes to campaign financing happens, you can rail against the Dems or the GOP and you’ll just be pissing into the wind. And, as long as you keep the tribal (political party) fires burning, you’ll be distracted from what needs to be done: Campaign Finance Reform.
What’s a pension plan? Where I live, those were all made obsolete ages ago in exchange for the “You’re On Your Own, Suckers – Play In The Crooked Casino” plan.
I think one thing people fail to realize when they are talking about state or city funded pensions is the chance that the U.S. government will nationalize them and make every citizen on the hook for the obligations. The reason people don’t think about it is because of the distinct unfairness of it which is exactly why it might happen.
Pension insurance based on life expectancy and wise use of treasuries for state finance was almost single handedly invented by one person, Dutch 17th century mathematician and statesman Johan de Witt. He had tremendous value for the young Dutch republic and made a huge fortune for himself on the side, but his life had a nasty ending; probably an early sign of things to come with pensions ;(
I agree that pension planning is almost dead now, privately investing in the Ponzi stock market etc. no longer works either (statistically almost zero real returns guaranteed for the next 10-20 years) and purchasing a reliable income stream like a small business is impossible for most of us (also because most small businesses are terminal thanks to easy money from central banks, and vast changes in the Ponzi economy). Government pensions only works because politicians make up the rules and can increase taxes in order to keep these fat pensions afloat for a bit longer. While the Dutch pension system is supposedly the best in the world, to me it looks like hardly better than what I read from US states like Illinois (plus we have the largest private debt in the world …).
ETF’s are the big push with the stock brokerage firm. They collect your 1% fee& do nothing. Highly rated ETF’s can turn south with unfavorable investments.
You pay a 1% fee to get an ETF?
Woodford should be looking at spending the rest of his life in prison. If this was a just world, that’s where he’d be heading. Scams like listing illiquid assets on a tiny exchange with no trading should be a crime. The basic setup of an open-ended fund with a ton of illiquid bets placed should be a crime. But, of course its not, because in the Free World, the criminals get to write the laws.
At the very least, every pound of personal property and family wealth Woodford has accumulated should be seized and given to the people he’s defrauded. But of course, that won’t happen in the Free World.
Admittedly I was caught up in this and have a decent chunk of change wrapped up in WEI
To be honest I’ve learned a straight up lesson about the risks of open ended funds and realise I should have simply stuck with passive index funds tracking highly liquid and stable dividend blue chips, and the FTSE 250 / All Share. It’s sort of staring me in the face (hindsight and all that): in U.K. you can easily have a balanced equity fund with a lean towards Europe and U.K. and it will yield like 3-3.5%. Why bother with an active fund like Woodfords? The main indexes are severely undervalued and will grind higher and provide an excellent income over the long haul.
No campaign contributions from anyone, anywhere.
Each candidate gets 60 minutes of tax payer paid national air time available on a download podcast basis, to make their case.
Each Senate and House seat is giving a hard line budget for total office and staff.
Except for National Emergencies involving national security, both houses meet one week out of each month with attendance being mandatory.
Every expenditure is available on line, requester, approver, amount, date, payee, and purpose.
Elected officials must show all incomes, expenses and a balance sheet while serving….both office and personally.
I know, this would bankrupt the country and DC would turn into Detroit, but what else can be done with this stinking situation?
You need to add: “End all closed civil service meetings where no one but civil servants attend and release all minutes of all previous civil service meetings for public scrutiny”. Only then will we be able to track back to find out exactly why; certain changes to the manner of dealings with the savings of the people were made that have brought the entire financial system to where we are today. We have to have complete access to the past history to enable a return back to previous success.
When I first started my own investing ( after the Dot.com collapse when GE Financial lost 1/3 of my IRA) I dabbled in biotech. Call it beginners luck, sector rotation or whatever it was easy. I bought Inspire Pharmaceuticals at $3.50/share and in no time it was at $18.00. Dendreon did about the same. It soared when it passed its phase 3 trial and looked to be the first cancer vaccine to get FDA approval. I was kicking myself for not pouring all of my money into my ‘goldmines. Then I learned about ‘shelf’ offerings wherein the president of Dendreon, decided to cash in and offer large amounts of his companies stock that diluted his existing shareholders. Inspire couldn’t get FDA approval due to the nature of clinical trials and the FDA wanted another it to do conduct another one which takes years and costs vast amounts of money. I also learned that if a small biotech looks promising Big Pharma will swoop in and buy it before the small investors make too much.
It had a position in cold fusion??
OMG- if you didn’t run away when you heard that, well…….