Gilead is the Next Celgene - Similarities Between the Celgene Buyout and Gilead
Disclaimer: This post does not constitute financial advice. Author has a long position in Gilead. Do your own due diligence before making an investment.
(This is Part 2 of an investigation into the manipulation of Gilead’s stock price. Click here for all the articles.)
A few months ago, I came across an interesting comment by a user on Yahoo Finance. He said that the price action of Gilead reminded him what was happening to Celgene in the Fall of 2018.
At the time, I was busy with other projects and didn’t look into it. But the more Gilead dropped, the more the price action seemed suspicious. $GILD just wasn’t responding the way a stock should.
In a vacuum, good news should send a stock price up. After all, the stock market is forward-looking. Good news often means future revenues and profits will go up.
But over the summer of 2020, Gilead stopped reacting to good news.
Here are some press releases by Gilead. You might expect some optimism on these news pieces, but Gilead closed in the red every day these press releases were issued. Does that seem natural to you?
1. Dec 16, 2020 - Kite’s Tecartus™ (KTE-X19) Granted Conditional Marketing Authorization for the Treatment of Relapsed or Refractory Mantle Cell Lymphoma in Europe
2. Dec 10, 2020 Gilead Advances Oncology Portfolio With New Data From Phase 3 ASCENT Trial of Trodelvy® in Metastatic Triple Negative Breast Cancer
3. Dec 10, 2020 Gilead Sciences to Acquire MYR GmbH
The next five press releases were all over the weekend of Dec 5-6, 2020. All fantastic data released at the ASH conference. But the next day, Gilead closes in the red.
It goes on, and on, and on…
10. Nov 2nd, 2020 - European Medicines Agency Validates Marketing Application for Filgotinib for the Treatment of Ulcerative Colitis
[Source: https://finance.yahoo.com/quote/gild/history/ for open & close stock price info, www.gilead.com for press releases.]
Pretty much every positive news release since late June had the same result: blood in the streets.
It was the same story every press release. If it was good news, the stock would close flat or red.
If it was bad news, it would close super red.
Does this seem natural to you? Of course not. It’s by design. Someone is trying to make Gilead look like a terrible stock. These people might have done the same thing to Celgene. It’s a self-fulfilling prophecy in a way. Short every pop, trash every great news release and the stock will drop. Which leads to stop-losses being triggered and more dropping.
Let’s compare Gilead to Celgene, a company that was bought out on January 3rd, 2019.
Here is a monthly chart for Celgene on December 22nd, 2018.
@Stocktwits
If you’re a Gilead fan, that chart might look familiar. Here’s what Gilead looks like today, December 22nd, 2020.
@YahooFinance
The chart action appears strikingly similar. Which is what you might expect if the same people that trashed Celgene, are now trashing Gilead. It worked before, why not try it again? Different stock, same plan.
Why reinvent the wheel?
Let’s see what else Celgene and Gilead share in common.
Hitting 52-week lows - check
Down 30% from intra-year highs – check
People calling management morons - check
People saying if CEO resigned then the stock would go up – check
Retail investors confused by constant negative price action – check
Stock price not following bio indexes like $IBB or $XLV - check
Stock price not following broad indexes like $SPY, or $QQQ – check
Red almost every day, pre-market, and after-market, but no news - check
CEO is also the Chairman of the Board of Directors - check
Company spent billions on acquisitions in the last year(s) – check
Celgene went on a buying spree prior to the merger. In 2018 they spent billions on Juno Therapeutics and IMPACT Biomedicines.
Gilead spent more than 30 billion on buying up companies in 2019 and 2020. You can see a detailed list of a Gilead’s acquisitions in Part 1, and how each one relates to Roche (the company that is probably trying to buy Gilead.)
You might be thinking, okay but they couldn’t have been planning this merger for years, right? That would be crazy.
Nope. That’s exactly what they did. It’s just the market that was surprised.
@Endpoints
Celgene management knew this was coming, because they’d been organizing it.
@FiercePharma
It seems this merger had been planned for more than a year. So if you’re expecting the management of Gilead to come out and defend the stock price…don’t.
It didn’t happen with Celgene and it isn’t happening with Gilead.
@Endpoints
“We got a great deal on that house after we burned it to the ground.” - Jimmy Weasel, CEO of Weasel Mergers and Acquisitions
It’s called manipulation
Using the internet to manipulate thoughts isn’t a new idea. It happens all of the time. Everything from movie reviews to photos of people holding a new product. Like /r/HailCorporate. An entire section on reddit is devoted to advertisers who post photos of their products and try to make them look like regular posts by ordinary people.
At this point in my research, I was pretty convinced that Gilead was the next Celgene. But not 100% convinced. I would need more evidence. More similarities to Celgene.
My thinking was, if they manipulated Celgene, then some of that manipulation would be still be online somewhere.
I decided to go digging into the past.
On most websites you can delete your comment history. Manipulators delete their posts and accounts to hide their tracks.
But they can’t do that on Stocktwits. After five minutes a post will stay forever.
Some websites will delete a message board after a stock is bought out or goes bankrupt. But not on Stocktwits. All the comments before, during, and after Celgene was bought are still there.
Check it out yourself: https://stocktwits.com/symbol/celg
Just keep scrolling down.
It might take a few hours and your web browser might crash. (It’s a lot of data to load. Do not do this unless you’re on Wi-Fi.)
If you’re not inclined to scroll that far, don’t worry, I’ve got you covered.
I scrolled back to early December 2018 and took a ton screenshots. Here are some posts. You might recognize some of these users. They were extremely negative on Celgene in 2018.
Low and behold, some of the *exact same users* are negative on Gilead in 2020.
Do these users just short companies with bad charts, or do they work for an investment bank or hedge fund that’s trying to facilitate a buyout? Are they so lazy they didn’t even bother to create new accounts?
Maybe.
This first section of screenshots is pre-buyout. The second section is after the buyout announcement, when the manipulation was still happening. After that I’ll show you some of the current comments on Gilead. In the current Gilead comments, you’ll see how close the language is to what certain users were saying about Celgene in 2018.
(Following images are all from Stocktwits)
Very familiar.
It’s the CEO’s fault! He has years of experience but also knows nothing. (I dub this, The Management Paradox)
You hear this a lot about Gilead.
Let’s talk about the Anchoring Effect.
This is an economic principle/mind trick.
You see it every day, you probably just don’t realize it.
Anchoring is often used by marketers to make you think you’re getting a great deal.
How often do you see a price tag that says something like: $50 (comparable at $95).
Or: Sale, $50 (Regular price $95).
Whatever you’re looking at seems like a great deal, because your mind focuses on the $95.
Want to test it?
Here’s a quiz you can give some friends. It’s from one of Richard Thaler’s best-selling economics books. I forget which one. Probably Nudge.
You’ll need at least two friends. Speak to them separately.
Tell one friend that Abraham Lincoln died at age 56. Then immediately ask them how old they think Ghandi was when he died.
Odds are they’ll give you an answer that’s around 56.
Now, tell a second friend that Abraham Lincoln died at age 86. Then ask your second friend how old they think Ghandi was when he died.
The anchoring effect will have the second friend give an answer that’s closer to 86. Even though it’s the same question, and it’s irrelevant how old Lincoln was when he died.
This is what bears do with stocks. They tell you a number that’s way below the current price.
“Support at 50.” - Dumb Bear
“I’m a buyer at 47.” - Scam Artist
Meanwhile your stock is hovering at 60. But 50 seems feasible. You begin to doubt your investment thesis. Your brain tricks you into thinking the stock might fall to 50, so you sell. And the manipulators win.
Coincidence: Citi lowered their price target on Gilead from 75 to 72 just this morning…. (December 22nd)
Going through old Celgene posts I felt particularly bad for this user. Whoever is manipulating these stocks doesn’t understand how much mental anguish they’re putting people through.
Or maybe they do and they just don’t care. Either way it’s unacceptable and the manipulation of equities has to stop.
You often read comments on how the CEO of Gilead is nowhere to be seen.
Frequent occurrence with Gilead. $SPY is up 15% for the year, but $GILD is down 12%.
Be afraid of tax loss selling!
Remember, the Celgene merger was in the works since 2017.
Gilead sees your 5-year-low, and raises you a 7-year-low!
Anchoring.
Anchoring. This user would post the same comment over and over. Reminds me of the guy Gilead’s Stocktwits board who shows up once a day to say: “48 eoy!”
$GILD down 30% in 3 months WTF
There were a bunch of these posts. Celgene insiders picked up a ton of shares in late December. I’m sure they said it was part of a pre-planned purchase agreement, but the merger plans went back more than a year so……………..
Anchoring.
Okay this one I actually laughed out loud.
lore78 was the only one who figured it out. I hope they held until January 3rd.
Down 1% on nothing. Reminds me of Gilead today. Down 2.5% on nothing. Panic in the streets.
Very familiar with this price action.
Kermit notices that something is weird.
Massive selling right before Christmas. (Sound familiar? Gilead hit a new 52-week-low today, December 22nd.)
Defeated.
More CEO blame.
The comment by BioCrEq makes me think of the five great press releases from Gilead’s ASH data. Stock closed red.
Poor Kermit :(
Avoid the sector, they said. It’s a disaster, they said!
You often see people saying they hate Gilead.
Don’t buy now, it’ll drop later!
Oh wow, Gilead was also one of the worst-performing large caps of 2019. What a coincidence.
Calls for management to do something, anything. These are quite frequent on Gilead message boards.
Surprise when the stock is up.
Shorts covering for the Celgene buyout announcement that is less than 18 hours away.
This guy knows what’s up.
Okay, so those were some posts on the Celgene board BEFORE they announced a buyout.
The offer for $CELG a mix of $BMY stock and cash. Around $100 USD.
But the market was skeptical the deal would go through. And it took almost a year for it to pass. So, Celgene opened up around $85, and the bears went to work again.
It seems Wall Street wasn’t satisfied with just robbing people on the way down, they also had to rob them on the way up.
This was done by creating fear about the buyout. If people thought it wouldn’t close at $100, then they’d be more likely to sell at $85 and less.
I expect the same thing will happen with a Gilead buyout. Perhaps an initial offer of $90-100. Maybe the stock opens in the 80s, and the bears attack it again.
A merger between Roche and Gilead would have to clear several regulation hurdles. “It might not pass,” they’ll say.
There will be several months for the bears to trash Gilead again.
Moving on.
Here are some posts after the $BMY buyout was announced on January 3rd, 2019.
Where have we heard this before…
Poor beth2018. They fell victim to the manipulation.
Deal will never close apparently.
Celgene still not following the indexes.
lol
Ah yes, this guy again.
Another familiar face.
Deal isn’t going through apparently.
Yet somehow, it did.
So you see, when it comes to ravaging a stock, Wall Street shows no mercy.
Now let’s take a quick look at what the bears have been saying about Gilead in December 2020. (Scroll through the Gilead board on Stocktwits to find more).
You might recognize some of these users.
(First section of screenshots are from Stocktwits, second section are from Yahoo Finance.
In Part 1 I talk about how Gilead might be fine with ditching Filgotinib, because Roche has their own RA drug.
Wall Street doesn’t hate Gilead. They love it. By manipulating Gilead into the ground, they can make a killing on covered calls. (This is probably legal. Or just too hard for the SEC to prove maybe.)
How are the manipulators keeping Gilead constantly in the red?
It’s easy really. They have a dump and repurchase pattern. It creates a gully in the stock. Flat at the open, sinks by mid-day, and recovers right at the end of the day.
This allows them to make the stock look constantly red, while not really moving the price all that much. They can’t tank it 2% a day indefinitely. They buy it up at the end of Monday, so they can smash it again on Tuesday.
Here’s what that looks like.
They sell a bit at market after-hours so the stock is red. Same with the pre-market.
Those two images look bad, right?
Except pre-market is usually only about 20,000 shares in volume.
Pre-market and after-hours volume is often light, so they can get away with only selling a few shares. Probably to themselves. One hand sells 1 share for 30 cents less. The other hand buys it. Stock appears to have dropped 0.45% premarket.
Everyone panics.
See how they only need 2 shares out of 1.2 BILLION to drop the price from $58.54 to $58.21?
They repeat this process over and over until the stock is trading at multi-year-lows.
Then comes the buyout offer.
Everyone is thrilled except for people who sold out too early, and the investors who realize they’re being fleeced.
Gilead is worth closer to $90 if you value it similar to its peers.
In summary: Someone is trying to steal Gilead, and they’re probably being helped out by the same people that allowed BMY to buy Celgene for cheap.
Both Celgene and Gilead share too much in common for this to be a coincidence. (Plus, it’s literally the same users inciting fear.)
To the corrupt bears who were too dumb to make a new Stocktwits account:
