This past week, via his surrogates’ Instagram feed [upon which, these same surrogates claim BTW, is the sole “official” Marty feed… heh!], Martin said given the disastrously bad call he made to short The Medicines Company, at about $31.50 — he’d just leave it and let it ride. His “logic” was that his four per cent of portfolio short has become two per cent, so just leave it… and hope.
Actually, The Medicines Company touched $70, this morning. Facts, it seems, are stubborn things.
If Martin had any real inkling of what shorting is about [in the real world, on real exchanges], he’d not make this call. The mythical carry-costs, on his mythical short don’t just mean he’s lost 100 per cent of his starting value… the cost to margin, and carry, this short now is over 400 per cent of what he originally had “at risk.” Once it went deeply under water, as it did, in the real world, he’d be getting daily calls from his broker, to post more real cash collateral, to secure the potentially infinite amount he could lose here. By my lights, with MDCO trading at $70 on the NYSE, he’d need over $85 on a per share basis — of new cash margin on deposit — just to keep the short open [which he entered at $31.50]. And, he’d need to pay interest on the loaned shares. So, all in, leaving the short in place is costing him over $95 on a per share shorted basis, in new cash.
He’s not made of unlimited funds, and several of his other shorts are equally under water. As I said this week, earlier, in announcing the denial of cert. by the Supremes — he’s lost more than half of his entire at risk capital now, in just over six elapsed months. In the real world, in sum — he would be broke, by now.
That is the end of my update, here — but for clarity, I will re-post my earlier piece on how this all was working out back when MDCO had “only” risen to $48. Hilarious. And… sad. This guy claimed to be “professionally” managing other peoples’ money.
Dateline: Early October 2019 — Back on May 6, 2019, Martin said he would short both of the above names, with equal weighting, in his portfolio.
Since this is his “power alley” of expertise, let’s take a look — now just about six months later [he hadn’t removed or changed these shorts, as of late July 2019].
One short — Teva, has paid off: he went short at about $14.90 — and it is trading at about half that, or $6.92 tonight. The generic wars — coupled to increasingly real risk of drug price controls in the US are hurting the Israeli firm.
The other? Not. so. much. Martin said sell — at about $31.50, on May 6. He said it would drop. He specifically cast a skeptical eye toward the PCSK9 candidate, inclisiran — and its propsects to limit cardio-vascular risk and manage cholesterol.
Well, the clinical results on inclisiran are coming in for The Medicines Company, now — and that’s very good news for familial hyper-cholesterol sufferers. The siRNA candidate looks to be effective.
So, instead of falling, the stock is still rising, through $48.51 tonight — having touched $50 for a bit yesterday. So, as the header indicates, Marty has lost more than 55 per cent on that bet, so far. And that’s before taxes and the carry-cost to borrow those shares.
Just to be clear, here though — overall, his entire portfolio is off nearly 40 per cent, or over $240,000, on about $600,000 at risk.
Now you know.
Just a minor update, to put this filing from Mr. Painter’s counsel on record, here. To my eye, this ten pager looks well-grounded. Should Mr. Painter prevail here, and be able to strike all the counterclaims — a quickened path to victory would lie ahead, for him. But I do think some of the Turing claims, though far-fetched, turn on purely factual questions — ones a jury needs to decide. So, not all the counterclaims will be stricken at this stage, in my view.
