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post Posted: Today, 08:34 PM
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In Reply To: LevelHeaded2000's post @ Today, 01:34 PM

BONY, our ADR holder

Theoretically, there should be no such disparity. ADRs are certificates representing a certain number of shares of a foreign company that are deposited in a bank here. The bank has bought the actual shares, but investors here trade the ADR certificates that represent those shares, not the actual shares. ADRs were created as a convenient way for U.S. investors to access foreign companies, and for those companies to have access to U.S. capital. The price of the ADR is supposed to be the same as the underlying share.

However, there is often a difference between the two prices. There are essentially three situations in which an ADR might trade at a premium or discount to an underlying share, says Tom Sanford, a vice president in the ADR department at the Bank of New York, the largest holder of ADRs.

First, investors might pay a premium for less risk with the ADR. In many emerging markets, for example, where settling trades can be an exasperating process, investors might feel more comfortable buying an ADR than trying to buy a local share. Because there is more demand for the ADR, the price will go up.

Second, differences in liquidity between the two markets can explain the price discrepancy. "Wherever there is more liquidity, it will drive the price," says Sanford. "The other market will have to catch up." That in fact will usually occur as arbitragers, typically large, institutional investors, try to play the disparity.

The third situation that could trigger a price difference between an ADR and a local share is a restriction on the number of shares that can be owned by foreigners. With a limited number of ADRs available, demand in the U.S. can boost the price over that of the home market.

Theoretically, it is possible for a retail investor to try to take advantage of the premium or discount, just as professional arbitragers do. That won't be possible in a situation involving Taiwan, where there are limits on foreign ownership. But it is difficult for the retail investor to identify those arbitrage opportunities and take advantage of them before the big guys do, not to mention the expense and difficulty of buying shares in foreign markets directly.

"You should buy ADRs for the same reason you buy U.S. stocks -- because they are either growth or value," says Sanford. "Trying to play an arbitrage will probably backfire 99 times out of 100."

post Posted: Today, 04:57 PM
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Check out this US investor. He has just discovered our australian pearl and is very excited about it. More persons like him should follow soon.

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post Posted: Today, 04:50 PM
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In Reply To: Clinhope's post @ Today, 04:44 PM

One word: arbitrage. Companies trading on multiple exchanges will always be close in price (so long as sufficient trading volume) as any drift from this opens up an arbitrage opportunity which markets players will seize on for a quick profit which restores the market balance.

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post Posted: Today, 04:44 PM
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Ok, that's it. Can someone please explain to me how CUV and CLVLY are almost always in lock step. If some algorithm is playing fiddle with CUV shorting, how is it that it once again, as has been the case for years now, we have the CUV price close to within a few cents of the equivalent U.S CLVLY closing price?!

I can understand it would be within say 5% of each other would be "natural", but this is something else.

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post Posted: Today, 01:34 PM
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In Reply To: Billy Boots's post @ Today, 10:18 AM

Of course Clinuvel will reach highs and beyond again. Shorting has no long-term relevance for a stock. It is a tool that only has effect once over a short time-horizon. Once the shares are shorted they stop causing further negative impacts. At that point shorted shares can only provide positive impact as they must be re-bought.
The shorts will break once the stock price rises. There is unlimited risk while shorting, so any shorter must be fairly conservative. No one wants to short the next stop that goes up 10x. That will be a lot of money lost.

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Billy Boots
post Posted: Today, 10:18 AM
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In Reply To: Johnny H's post @ Today, 08:08 AM

Another question, does this actually mean that Clinuvel will never get to the highs that we once knew, just curious? (Or will we always be at the mercy of these short covering dirtbags!)


post Posted: Today, 09:44 AM
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Hoping that the worm has finally turned

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Johnny H
post Posted: Today, 08:08 AM
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I don't expect a significant change in short interest leading up to the PDUFA date.

Whether they're using proprietary software or off-the-shelf software calibrated to the ASX 200, I doubt it knows what a PDUFA date is. They're trading strictly on technicals. Given Clinuvel's P/E and penny dividend, it makes sense that the software thinks it's appropriate to short 5% of outstanding capital.

When Clinuvel starts raking in cash from US sales, I expect the shorts to drop well below 2%.

Clinuvel until my bowels release for the last time.
post Posted: Today, 07:09 AM
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In Reply To: Johnny H's post @ Yesterday, 11:57 PM

But for those leadings and just volume Trades, does it matter for what price they are traded? It sounds like it doesn’t .. so they won’t care about fda or any price spikes ?! If most of the formal short volume is due to that then no need for anyone to cover for high prices?!

post Posted: Today, 06:32 AM
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In Reply To: Johnny H's post @ Yesterday, 11:57 PM

It's very likely this trading is completely disconnected to the stock's value. I was just chatting with a guy who plays this game.... it's a game... they don't look at fundamentals, the only look at technicals. They make make money, the're in and then they're out without ever knowing thing 1 or thing 2 about the stock or all of our little fears. We're in a bigger game now, fundamentals win in the end, but not always along the way.

It's a good bet that the drivers of the recent fluctuations don't even know what a PDUFA is. They're in and they're out like a hord of locusts.

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