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Cell Therapeutics: Enticing To All, Convincing To None
May. 6, 2014 9:10 AM ET | 2 comments | About: CTIC
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
Summary
Cell Therapeutics has been walking the line between disappointment and potential for a decade. As a result, a significant divide exists between supporters and critics.
After numerous instances of dilution and reverse stock splits, existing shareholders and company executives hope that a noteworthy 2013 partnership agreement can finally help the company reach its potential.
Consistent insider selling and a complete absence of insider buying indicates that there is little immediate upside ahead.
A respectable institutional investment stake and two significant institutional investors show that there is reasonable confidence in the company's future prospects.
If current management and leadership can't "right the ship", the possibility of a buyout could be in the cards.
As it was once said, the distance between ingenuity and insanity can be measured only by success. Perhaps it's an unfair premise, but it remains true nonetheless. Innovators and visionaries have long been the targets of ridicule and doubt. However, once one of those innovations, or one of those visions, comes to fruition and becomes part of the mainstream, the validation of that manifestation changes everything. Before that point in time, the man behind the idea is deemed "crazy", however, after the fact, he is often then referred to as a "genius." Hence, the bridge between the two definitions is built only by success.
History has a long record of such instances. Charles Darwin, George Zweig, and Ludwig Boltzmann were all individuals who were once referred to as charlatans, heretics, or madmen. History would prove otherwise, and today, each of those men is remembered as an innovative genius who changed their respective fields of thought. There are various examples of similar circumstances having unfolded in the corporate world. Steve Jobs and Elon Musk were both, at one time, considered to be nonconformist dreamers that were leading "cult stocks" incapable of making any significant market impact. However, as recent history has proven, both Apple (AAPL) and Tesla (TSLA) have performed quite well. Once again, success proved to be the catalyst for one man making the transition from being perceived as hopelessly audacious to being a renowned and respected pioneer.
The point here is simple, as a collective social organism, people tend to reject possibility in favor of probability. We, the human race, are predisposed to trusting what is known to be, and rejecting what could be. It is, however, a fine line. We want to believe, but we are instinctively held back. It comes down to commitment. For example, everyone wants to cheer for the underdog; but how many actually bet on him? That's the difference. That is where hope is asked to become action, and that is where we, as a people, struggle. It's nice to support the longshot, but it is an entirely different experience to invest in him. This often misunderstood psychological paradigm is the basis for the popular phrase "put your money where your mouth is." In other words, if one really believes in something, then he or she will prove such by financially supporting it. In some ways, and to some degree, this same premise is the faultline which runs below the equities market. Every time an investor makes an investment, he or she is declaring his or her belief in the said company. If the company does well, the investor is revered as a prophet. If the company fails, the investor is written off as just another dreamer led astray.
It is with this premise in mind that this article will explore the history, pipeline, and prospects of Cell Therapeutics (CTIC), a Seattle-based biotechnology company balancing a tumultuous history with a plethora of potential. Some investors are utterly convinced that Cell Therapeutics is a company led by "crooks" that have a blatant disregard for shareholder interest. Other investors are more forgiving of the obstacles en route to commercialization, and believe that the company could make a significant impact on its addressable markets. This divide is widespread, and depending upon one's values and perspectives, both arguments have merit. An example of this can be seen below, where in the comments section of a well-presented article featured on Seeking Alpha, back to back comments represent opposite sides of the argument.