The Cassava Story
$sava
The Cassava Story: Sir, can you spare $5 to cure Alzheimers?
Short sellers can be incredibly nasty but occasionally very right. I vividly remember Straight Path Communications in 2015 was the target of renowned short seller Kerrisdale in many vicious reports. They claimed CEO Davidi Jonas and his son were involved in some kind of cabal which upon inspection was hard to refute and it make the stock holder feel a bit dirty. Did $STRP really have the spectrum in the 28-39 GHz available to be sold? And what was it worth? They claimed the company had sham trials of the millimeter wave radios which they moved from location to location upon FCC inspection to keep the licenses current. Kerrisdale made it appear as though any minute the FCC would revoke their licenses and take back the spectrum making the stock a $0. They said the upside even if they kept the spectrum and it worked as expected was around the current stock price of $20. They claimed the spectrum was flawed and difficult/expensive to use given issues such as the wavelengths traveling thru solid structures such as buildings. All nasty right? Why would anyone own the stock of an alleged charlatan with some chance the spectrum would get taken away?
Straight Path found itself in a bidding war which resulted in AT&T paying over $1.6 billion or 8x the stock price that Kerrisdale was short. Game over.
Could Cassava be the next Straight Path? Well, no one has had any success treating Alzheimer’s patients to date. Period. Biogen actually got their drug, Aducanumab, approved by the FDA with data that wasn’t even compelling, didn’t show much more than it was tolerated well and maybe, maybe it slowed the cognitive decline of patients. That story ended badly with insurers refusing to adequately reimburse and the backlash on the FDA approving the drug still a stain to this day. Before we continue, let me preface that I am not a doctor and know little about the science here. Make you feel confident? I also am not an engineer that could emphatically state that $STRP spectrum was 100% going to be worth a ton, but that worked out just fine. I have also seen many hedge funds employ doctors who couldn’t pick a stock for their life! Me, I am a stock investor, avid reader, bs sensor, assessor of risk/reward and root for the good guys! I am not always right, to be sure, but I am confident that my hit rate has been high enough over a long career to be remain successful. Fair enough? Let’s continue on $SAVA.