Thursday, March 25, 2010

CIGX - 450% Run up - The story behind the story - behind the story

CIGX (formerly STSI) is trading 2.70 - up 440% since December. The IV30™ is up 8 points to 190. The LIVEVOL™ Pro Summary is below.

I lost money trading this stock when it was STSI and it lost a lawsuit against big tobacco - got emotionally tied to the story. It was the largest patent infringement suit ever and wreaked of impropriety from the judge all the way down.

It was, and still is, simply the most fascinating story I have ever read related to finance. Curious minds can go: HERE
NOTE: This takes a while to load, but man is it worth it! Can you say, Composite Operator?

Anyway, the above did nothing and the stock went almost to zero. The recent news - if you can call it that, is this:
Reference: Click Here.

1. CIGX’s CEO has recently bought 2.3 million shares at $1.14 per share for $2.7 million.
2.CIGX’s largest investor, Tradewinds Master Fund, has also raised its stake in the company. The fund bought 1.7 million shares at $1.14 per share after entering the stock in December at as low as $0.59 per share. Tradewinds Master Fund now has a state of over 16% and, as per SEC’s new rules, it cannot sell the shares for the next six months.
3.Robert Roskamp, who started the Roskamp Institute conducting research on Alzheimer's disease, bought 769,000 shares for $1 million. He has also bought the right (a warrant) to buy an additional 1,000,000 shares for $1.50 per share. The chief scientist at Roskamp Institute, Michael Mullan, was instrumental in ascertaining the relationship between the buildup of the beta-amyloid protein in the brain and Alzheimer's. Meanwhile, Star Scientific is also engaged in the development of pharmaceutical products for the treatment of a range of neurological conditions, including Alzheimer’s disease. There is a possibility that the institute is conducting its research on Star Scientific’s product or Robert Roskamp knows something.

Unrelated to above - the stock actually jumped all the way to $3 right after the open today then fell to its current level. The Tick Chart is included (click to enlarge).

I believe the company is now selling stock to fund operations as they essentially have zero revenue.

The company has traded nearly 11,000 options in the first hour on total daily average option volume of just 1,931. In reality, this thing has been trading tens of thousands of options in the last week every day. The Stats Tab and Day's biggest trades snapshots are included (click either image to enlarge).

The Options Tab (click to enlarge) illustrates open interest - note the calls - even the Apr 4. Apr 5 and May 3 calls have large OI.

Finally, the Charts Tab (6 months) is below (click to enlarge). The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue). The yellow shaded area at the very bottom is the IV30™ vs. the HV20™ vol difference.

Note the stock run up AND the option volume bars at the bottom. The green color indicates unusual opening order call buying by customers relative to opening order put buying - from ISE.

This is trade analysis, not a recommendation.

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1 comment:

  1. There seems to have been alot of money lost in this investment stock. I feel bad for Ophir Gottlieb, what a shame. Yet it is business and that is how business is sometimes. I will though, get invested in roskamp institute.