I was spitballing about the legal matters with a buddy of mine over some scotch last night. He agrees with me that civil legal matters regarding Mako are wrapped up. The 10-K seems to confirm this with no legal proceedings listed. Here’s why we think this. We're not lawyers but this is pieced together from some google research on previous cases. It goes without saying this is all non-legal opinion and speculation.
Does anyone have any reason to think the following reasoning fails to hold water?
No Demonstrable Losses
Anyone who sold in the days following the Mako article likely sold somewhere between $1.50 and $2.50. I believe the lowest print was $1.52.
If the Mako information was fraudulent, we would consider the dismissal of the Rosen lawsuit to be affirmation of such. As a result, per the Efficient Market Hypothesis, within 90 days we would expect the market to have digested the full revelation of it’s falsity. This is typical in determining inflation in cases of fraud.
Aug 5, 2016 closed $2.44 (day of dissemination of false information)
June 8, 2016 closed $1.54 (day of disclosure of good information)
Sept 8, 2016 closed $1.32 (90 days post disclosure of good information)
As a result it seems impossible for sellers following the Mako article to have lost money. In fact, anyone who got scared out of the Mako article has had a very long period of time to buy back in far cheaper than their exit price. That holds to this day. Mako, in fact, did a favor for anyone who sold in the days following the lies.
For this reason, I don’t believe there can be a shareholders suit against Mako/Rosen because it is impossible to calculate any actual losses. Now, we all know the effect that Mako had on the trajectory of this company. It wasn’t good. Unfortunately, as obvious as the stock chart is, the market has fully digested the falsity of Mako and we still sit far lower than the day they released their lies.
The same goes for the market cap of the company even though market cap changes are not realized losses.
Precedent is Against Us
I don’t believe we can find a significant number of shareholders who sold shares purchased prior to Mako/Rosen that sold for less than $1.32/share.
NNVC attempted to unmask Pump Stopper and it was thrown out by the judge.
https://www.law360.com/articles/553295/defama...thrown-out
Every reason the Judge cited also applies to the Mako article. There is a reason Cellceutix has not gone after Mako and it is because they would be unable to convince a judge to compel Seeking Alpha to disclose his identity. The precedent for the opinion defense is clear here with regard to Seeking Alpha articles.
Time is not on our Side
Relying on the SEC, if they take action, might work but it will take time. Even if they unmask Mako, and we could get around the opinion defense, libel has a statute of limitations. This has already expired in New York (1 year) and will expire in Nevada, where the company is incorporated, this August (2 years).
Rule 11 Sanctions
This is the only place we’re going to get to punch back. Pray the stock price goes higher before the judge makes a decision. I’d like to see Rosen get hit with millions rather than thousands.
Does anyone have any reason to think the following reasoning fails to hold water?
No Demonstrable Losses
Anyone who sold in the days following the Mako article likely sold somewhere between $1.50 and $2.50. I believe the lowest print was $1.52.
If the Mako information was fraudulent, we would consider the dismissal of the Rosen lawsuit to be affirmation of such. As a result, per the Efficient Market Hypothesis, within 90 days we would expect the market to have digested the full revelation of it’s falsity. This is typical in determining inflation in cases of fraud.
Aug 5, 2016 closed $2.44 (day of dissemination of false information)
June 8, 2016 closed $1.54 (day of disclosure of good information)
Sept 8, 2016 closed $1.32 (90 days post disclosure of good information)
As a result it seems impossible for sellers following the Mako article to have lost money. In fact, anyone who got scared out of the Mako article has had a very long period of time to buy back in far cheaper than their exit price. That holds to this day. Mako, in fact, did a favor for anyone who sold in the days following the lies.
For this reason, I don’t believe there can be a shareholders suit against Mako/Rosen because it is impossible to calculate any actual losses. Now, we all know the effect that Mako had on the trajectory of this company. It wasn’t good. Unfortunately, as obvious as the stock chart is, the market has fully digested the falsity of Mako and we still sit far lower than the day they released their lies.
The same goes for the market cap of the company even though market cap changes are not realized losses.
Precedent is Against Us
I don’t believe we can find a significant number of shareholders who sold shares purchased prior to Mako/Rosen that sold for less than $1.32/share.
NNVC attempted to unmask Pump Stopper and it was thrown out by the judge.
https://www.law360.com/articles/553295/defama...thrown-out
Every reason the Judge cited also applies to the Mako article. There is a reason Cellceutix has not gone after Mako and it is because they would be unable to convince a judge to compel Seeking Alpha to disclose his identity. The precedent for the opinion defense is clear here with regard to Seeking Alpha articles.
Time is not on our Side
Relying on the SEC, if they take action, might work but it will take time. Even if they unmask Mako, and we could get around the opinion defense, libel has a statute of limitations. This has already expired in New York (1 year) and will expire in Nevada, where the company is incorporated, this August (2 years).
Rule 11 Sanctions
This is the only place we’re going to get to punch back. Pray the stock price goes higher before the judge makes a decision. I’d like to see Rosen get hit with millions rather than thousands.
1
Innovation Pharmaceuticals Inc (IPIX) Stock Research Links
All content of my posts is my opinion and speculation. Do not treat anything I say as fact or actionable investment advice. I participate to challenge my investment thesis from any angle possible. Please do your own due diligence.
Current Positions:
Long CTIX.
Current Positions:
Long CTIX.
