Cramer's Mad Dash: Arena Pharma's Weighty Play

Wow, Cramer's bullish on Arena Pharmaceuticals.  Gotta check the Mayan calendar.

http://video.cnbc.com/gallery/?video=3000176847

Thestreet.com reiterates Sell recommendation--Which is a contrarian signal to Buy

Adam Feuerstein is the biotech analyst at Jim Cramer's Thestreet.com.  He had a Sell recommendation on Dendreon ("DNDN"), before it subsequently soared from $3 to $58 after its prostate cancer drug Provenge was approved by the FDA on April 29, 2010.  (Editor's note:  shares of DNDN have subsequently plummeted back to $5.28 as of today due to commercial uptake issues).

Feuerstein has also had multiple Sell recommendations on another battleground biotech company, Arena Pharmaceuticals ("ARNA").  Shares of arena have also soared from its 52-week low of $1.23 to its 52-week high of $13.50 upon FDA approval of its anti-obesity drug Belviq ("Lorcaserin").  Today, Thestreet.com reiterated a Sell recommendation on ARNA, with the shares trading around $8.72.

http://www.thestreet.com/story/11800338/1/arena-pharmaceuticals-inc-stock-sell-recommendation-reiterated-arna.html

With the benefit of hindsight, any investors listening to Thestreet.com's recommendations would have lost money--or worse, missed out on spectacular returns of more than 1000%.

Meanwhile, Thestreet.com settled Federal civil charges of accounting fraud.  In typical Wall Street fashion,

TheStreet Inc. and the three executives neither admitted nor denied the allegations but agreed to refrain from future violations of the securities laws.

This outcome occurred despite these shenanigans by the company's executives:

The company filed false financial reports throughout 2008 which reported revenue from sham transactions at the subsidiary, which it acquired in 2007, the SEC said. The subsidiary conducts promotions such as sweepstakes on the Internet.

The agency said Alwine and Barnett made the phony transactions and also fabricated and backdated documents to enable the fraud.

Here is a link to the story:  http://finance.yahoo.com/news/thestreet-com-company-3-executives-182033815.html;_ylt=A2KJjb3ILNtQwGgApCSTmYlQ

Meanwhile, shareholder value of Thestreet.com has plummeted over the years.  Here is a price chart of TheStreet ("TST") shares from 1999 to December, 2012:

http://finance.yahoo.com/echarts?s=TST+Interactive#symbol=tst;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Shares have plummeted from $45 to $1.61.  How this firm has been accused of and prosecuted for accounting fraud, and has consistently put out wrong directional investing recommendations, and is now trading as a penny stock--but can still stay in the business of stock-picking is beyond me.  But wait--we have our answer:  Jim Cramer, the clownish host on CNBC's Mad Money show is Thestreet.com's co-founder.

In hindsight, TheStreet.com should have put a Sell recommendation on itself 13 years ago.  As for Thestreet.com's reiteration of a Sell recommendation for ARNA, you be the judge.

Cramer's TheStreet.com Charged With Accounting Fraud

You can't make this $hit up.  Millions actually listen to his advice as gospel.  His shenanigans actually extend further than these allegations, but we'll just let the court system give him a slap of the wrist.

http://www.zerohedge.com/news/2012-12-18/cramers-thestreetcom-charged-accounting-fraud

Jim Cramer, Gold: the running of the bulls

Now I'm worried.  Jim Cramer and I agree on this.


http://youtu.be/by31GBwhvXA

Wall Street analysts

This is all you need to know about Wall Street "experts", "pundits", "analysts", ad nauseum.

Shares of Lehman Brothers were trading at $12.69 on August 20, 2008, already down 87% from its 2007 peak.

http://www.ft.com/cms/s/0/586ed412-6ee6-11dd-a80a-0000779fd18c.html#axzz1OdXYUmPU

On August 21, 2008, banking analyst Dick Bove upgraded Lehman Brothers shares to a Buy recommendation. 

http://www.cnbc.com/id/26332773

Not to be outdone, on September 5, 2008, CNBC's Mad Money host Jim Cramer, went a step further and declared Lehman a "Screaming Buy", causing the shares to be bid up to $16.21, up $1.03 for the day.  It was due to the "Cramer effect", as he had a large following of retail investors (and probably closet institutional investors).

http://seekingalpha.com/article/94165-worst-downgrades-cramer-s-stop-trading-9-5-08

In fact, Cramer was going out on a limb here, he named Lehman his “screaming buy” for the last couple of hours of Friday trading. It “can’t get any worse there,” he said.

On September 15, 2008, Lehman Brothers was forced into bankruptcy, and shares plummeted to $0.  Investors in Lehman Brothers shares lost everything.

CNBC's Jim Cramer says ARNA is a Buy

But he also tells longs who bought ARNA at lower levels to take profits and sell half their positions. Thanks but no thanks, I'm not selling any of my shares at these levels to his short cronies who are upside down and need to cover. There is nothing wrong with taking some profits off the table, but with two big pivotal events pending (independent Advisory Committee vote and PDUFA review), I'm staying long and strong. Every investor has different objectives and time lines, so decide for yourself, and don't be swayed by media "pundits" who may not have your best interests at heart. Good luck to all longs.

http://www.cnbc.com/id/38487197

Arena Pharmaceuticals [ARNA 7.95 0.97 (+13.9%) ]: ARNA is a buy, Cramer said. Thought the stock has enjoyed a big run, so investors who already have held the stock should have been taking some profits.

See disclaimers in the side bar.

Disclosure: long ARNA shares.

Jim Cramer likes ARNA as a speculative play

http://www.cnbc.com/id/15840232?play=1&video=1547554002

Normally, Jim Cramer's endorsement is the kiss of death, since I tend to be a contrarian. He has shunned ARNA before, so I was comfortable being long ARNA. Now that shares of ARNA have almost doubled since the July 1 announcement of the marketing partnership agreement with Eisai, Cramer is jumping on the bandwagon. In all fairness, I don't always disagree with Cramer's assessments; his recommendations are just badly timed, and viewers (largely retail investors) end up buying and selling at the exact inopportune times. His viewing audience on CNBC will perhaps drive shares up some more for the time being, as he has a large following. But be careful, because Cramer's rosy predictions have been known to set up retail investors for a disappointment, as short hedge funds could manipulate shares down after the run up. The smart (and sometimes crooked) money ends up slaughtering the dumb money.

However, with this knowledge, longs might be able to wait and buy the dip. The danger is if the horse has left the barn, and shares run up further on anticipation of positive outcomes at the Advisory Committee review September 16, and of course PDUFA review on October 22. It also provides shorts an opportunity, but I don't recommend retail investors short any stock, because the potential losses are limitless, and unless you're in the know, you will lose money even if you are correct on the direction of the price, but wrong on the timing. Wall Street will whipsaw you out of your position, leaving you with losses, despite being "right."

Overall, shares are ARNA are heavily manipulated, with a huge short interest of up to 27% of the float recently. Expect high volatility. Due to recent bullish news, there is heavy buying pressure, but naked shorts will manipulate the stock in order to cover their shorts and escape intact. If the outcomes are positive, shorts without an escape hatch will get torched.

I've been long ARNA for over a year, with an average entry point above $3, way below the current price per share of $5.26. I can afford to spectate while the share price gyrates, confident in Lorcaserin's FDA approval and commercial launch--that's why I'm long. My initial buy of $5 last year was untimely, but due to my bullish conviction for ARNA, I accumulated more shares on the way down to its lows. In other words, I doubled down, a risky proposition, but potentially highly rewarding. I won't deny there were some nervous moments, but in hindsight, my conviction enabled me to accumulate more shares at lower prices. I was able to overcome fear and doubt, and the price suppression ended up being a gift--everybody loves a sale. Sometimes courage and conviction are rewarded.

I'm long, locked and loaded. I'm not interested in trading in and out of this stock. For those that are, good luck to you.

See disclaimers in the side bar.

Disclosure: long shares of ARNA, short January ARNA put options.

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.

Jim Cramer--trouble brewing?

We all know Jon Stewart called Jim Cramer out on the carpet on his comedy show. But things are getting serious at Cramer's thestreet.com. They've already been removed from the Russell Index of microcap companies, as the market capitalization was below minimum threshold levels. And they are delinquent on their 10-Qc regulatory filings for 6/30/09 and 9/30/09.

http://www.sequenceinc.com/fraudfiles/2009/11/20/trouble-keeping-the-books-at-thestreet-com/

http://wallstcheatsheet.com/breaking-news/jim-cramer-says-sell-sell-sell-the-street-com/?p=2982/

Also, note the mass exodus of key executives and directors:
http://www.zerohedge.com/article/taking-it-streetcom

Caveat emptor.

Jim Cramer jumping on the gold bandwagon

Jim Cramer of CNBC's Mad Money was praising gold's all-time new highs today, as well as a couple gold mining ETF's. Which caused me to pause, as he's been bashing the shiny metal for a while. To his credit, I believe his trust fund owns Agnico, a gold miner.

Could this about-face be the death knell for gold's ascent? Perhaps a correction is in order, and I did take a little profit off the table yesterday. Cramer has been a good contrarian indicator, as I believe most of his calls are wrong-way bets (sorry, Jim, but your track record is questionable), but that doesn't mean gold will stop climbing in price. A correction is expected after recent surges, but the secular bull market for gold since 2001 is still intact, in my opinion. In which case, I'm with Cramer on this one. Booyah!

As long as central bankers worldwide are accomodative with low interest rates and stimulative monetary policies, gold has nowhere to go but up.

I started buying gold and silver coins and mining shares last November, gradually adding to my holdings ever since on dips. With the exception of one, all the mining shares have appreciated triple digits since then, yet Cramer is only now touting the yellow metal. Curious, but predictable.

Does this mean I will exit all my precious metals holdings? After all, as a contrarian, you want to bet against the extreme majority. When sentiment gets too exuberant, you sell. Likewise, when there's blood in the streets, you buy. In other words, has the trade become too crowded? Absolutely not. Because even though some people are now understanding the logic behind holding precious metals as an inflation hedge and as a reliable store of value, very few have acted on this knowledge. I would argue most people don't understand the value of gold--or just have a distaste for the yellow metal. Most won't jump aboard until the mania phase kicks in at much higher prices, when everyone and their brother will be recommending gold as a speculative bet, without understanding its intrinsic role as a means of preserving purchasing power.

The prudent strategy is to sell into that mania--not buy into it. The parabolic rise in gold and silver prices probably won't occur for a few more years, the normal lag time behind an increase in the money supply. Inflation usually doesn't kick in until these massive liquidity injections eventually flow through the economy via bank lending. But then again, we are in uncharted territory. This is a monetary experiment run by mad scientists at the Fed and US Treasury. No country has ever printed so many trillions of dollars so quickly.

An orderly decline of the dollar will cause a steady climb in gold and silver. But should there be a run on the dollar in a currency crisis, the mania phase in hard assets will go into high gear almost overnight.

See disclaimers on the sidebar.

Disclosure: long gold and silver, and long gold mining 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!