Arena Pharmaceuticals bashers

Jason Napodano just issued a negative report on Arena Pharmaceuticals, despite revenue and earnings coming in above analyst expectations.  Napodano works for Zacks Investment Research.

http://seekingalpha.com/article/1606842-arena-pharmaceuticals-current-prescription-rates-arent-the-real-issue?source=email_rt_mc_related_0

Yet, Zacks, who is Napodano's employer, upgrades Arena Pharmaceuticals to "Outperform."

http://utahpeoplespost.com/2013/08/arena-pharmaceuticals-upgraded-to-outperform-at-zacks-arna/

So what is going on here?  Why is there a disconnect?  Is this just an example of "unbiased, impartial" financial research?

This is speculation on my part, but this is could be an example of a captured analyst.  Sell-side analysts like Napodano issue "hit" pieces to cap the share price of targeted companies like Arena.  In doing so, it allows the shorts--some of them naked--to cover their short positions at lower prices.  It also allows longs to buy at lower prices.

In essence, "analysts" like Napodano and Adam Feuerstein of thestreet.com are paid bashers for big-money hedge funds.  They aren't working in the best interests of retail investors, because small-time investors don't butter the analysts' bread.

They purposefully dispense misinformation so the big money can clean up on outsized profits while the little guys get their clocks cleaned.  The objective of the hit pieces is to scare retail investors into selling their positions, driving the share price down further, so the hedgies can scoop up shares at discounted prices.  Shares flow from weak hands into strong hands.  Wash, rinse, repeat.

It's just another reason to ignore the "professional analysts".  Besides, Feuerstein majored in political science while in college.  Yet, thousands of his followers seek his advice on biotech stocks.  Good luck to the suckers.  Don't follow them over the cliff.

Adam Feuerstein Tweet on Belviq First Week Sales

$ARNA Belviq TRx for week of 6/14  (per IMS) --> 1,087
— Adam Feuerstein (@adamfeuerstein) June 21, 2013

To put this into context, Belviq was only available three days to reach 1,087 prescriptions.  It took Qsymia three weeks to get to 1,000 prescriptions.  Shares of ARNA are gapping up this morning as a result.  Shorts hoping for an unsuccessful Belviq commercial launch better cover now, because they are in for a rude awakening.

You know the tide is turning when Arena's former biggest basher has to report positive results.

thestreet.com is bearish on ARNA--again

Adam Feuerstein, thestreet.com's biotech analyst is once again bearish on shares of Arena Pharmaceuticals. He was also bearish on shares of DNDN and HGSI before they appreciated more than 10-fold from their lows. And he was bullish on VVUS before the advisory committee rejected anti-obesity drug Qnexa, tanking shares more than 60% the next day.

http://www.thestreet.com/story/10829837/arena-pharma-deja-vu-danger.html

In other words, his track record for predicting winners and losers is spotty at best.

Meanwhile, the editors of the New England Journal of Medicine and the Formulary journal, the most respected peer-reviewed medical journal and peer-reviewed drug management journal, respectively, were overwhelmingly positive of ARNA's Lorcaserin benefits for obese and morbidly overweight patients, balanced against a clean safety profile.

Mr. Feuerstein is a "Senior Columnist" specializing in biotech and works for thestreet.com, a public company being investigated by the SEC for accounting irregularities.

http://www.zerohedge.com/article/jim-cramers-thestreet-being-investigated-sec

thestreet.com is also a defendant in a lawsuit seeking $250 million in damages for business defamation, product disparagement, and injurious falsehood.

http://wallstreetpit.com/22485-generex-gnbt-launches-250mln-lawsuit-against-thestreet-com-tsmc

For what it's worth, Mr. Feuerstein has a bachelor's degree in political science from Emory University.

See disclaimers in the side bar.

Disclosure: long shares of ARNA.

ARNA analysts

Let's break down who got it right and who got it wrong on VVUS and ARNA.

http://www.streetinsider.com/Trader+Talk/Arena+Pharmaceuticals+%28ARNA%29%3A+Upgraded+to+Overweight+at+J.P.+Morgan/5811273.html

Thumbs up to Cowen & Co. and Piper Jaffray for getting it right, and understanding the importance of safety in FDA approval decisions.

Thumbs down to JPMorgan and Adam Feuerstein of thestreet.com for getting it completely wrong. At least JPMorgan and Adam are smart enough to reverse course on ARNA--after Qnexa's rejection.

Big thumbs down to Rodman & Renshaw analyst Elmer Piros for downgrading ARNA with a price target of $1.

Recall Jonathan Aschoff, a Brean Murray Carret & Co. analyst, at one time had a sell rating on DNDN with a $1.50 price target. DNDN shares recently had a high of over $58.

Is Wall Street crooked? You decide.

Generex sues thestreet.com for defamation

Generex filed a $250 million lawsuit against thestreet.com and Adam Feuerstein for business defamation, product disparagement,and injurious falsehood.

http://finance.yahoo.com/news/Generex-Launches-250000000-pz-450844841.html?x=0

Jim Cramer, TV host of CNBC's Mad Money, is co-founder and Chairman of thestreet.com. I blogged about thestreet.com's problems with the SEC in this entry.

Note that Feuerstein was also bearish on Dendreon when it was $4 a share, and it is now hovering around $40. I blogged about purchasing shares of DNDN despite bearish sentiment from many analysts here.

The takeaway message is don't rely on so-called experts or pundits. As always, do your own due diligence.

Disclosure: no position on GNBT. Long DNDN shares.

It could be lights out for Cramer's thestreet.com

Biotech investors have had a hate/hate relationship with thestreet.com's biotech "analyst" Adam Feuerstein, as he has bashed promising companies, probably as an accomplice in bear raids against microcap biotech companies, orchestrated by shorts and hedge funds. Well, Jim Cramer's thestreet.com is about to get de-listed in an ironic comeuppance. Perhaps Cramer should have hired an analyst with a biotech background, instead of a political science hack.

http://www.zerohedge.com/article/taking-it-streetcom

He failed as a hedge fund manager before becoming a cheerleader on CNBC. And now he has failed as the CEO of an investment company. Mr. Cramer better keep his daytime job at CNBC. Booyah!