did Shkreli ever make money trading or just defrauding

B

billyjoerob

He borrowed the hoodie and arrogance from Zuckerberg (the movie character) but he's obviously smart too.

https://t.co/7AnSj56dqv

It looks like he's run two funds, Elea and MSMB. Elea failed and he owed Lehman Bros $2.3M for a trade that went against him. MSMB also failed and it looks like he was defrauding a company (Retrophin) he was running in order to bail out the investors in his fund (or something like that. It's hard to follow). Anyway it looks like boy genius only ever lost money in his two funds, Elea and MSMB.

Does anyone know what the real story is? I have a feeling this is not going to end well for Martin. A jury would convict him without even bothering to deliberate.
 
billyjoerob said:
I have a feeling this is not going to end well for Martin.
More...

I have the same feeling.

Creating a short squeeze in KBIO are we? Well that's just swell, but, unless you sell shares into the squeeze it is of no use... Then, the bag-holding for shrkeli & company begins. It is after all a worthless asset.

...And under these circumstances how do you legally sell shares? - I'm afraid you don't! Options? None on the listed side, and OTC? - You'd get laughed out of the room.
 
I love how Shkreli says that he would pay the $2.3M bill to Lehman if they would just ask him. He really is a first class troll.

As for the KBIO short squeeze, he personally doesn't have to sell into it to profit from it.
 
The shares are parked with a brokerage. So the brokerage can short, using the shares . . . and then pays Martin a huge fee for the short or finds some other way to compensate him, for instance by giving him shares in an IPO guaranteed to open above IPO price. Or the brokerage shorts and then covers + buys into a secondary at an inflated price, passing some of the profits along to Martin and KBIO. The short is guaranteed profit for the brokerage because they hold the shares.
 
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billyjoerob said:
The shares are parked with a brokerage. So the brokerage can short, using the shares . . . and then pays Martin a huge fee for the short or finds some other way to compensate him, for instance by giving him shares in an IPO guaranteed to open above IPO price.
More...

Hum forgive me but although creative that does not seem plausible to me.

In the first scenario you are talking about the borrow, and if pulling the borrow is required to create the squeeze then you can't get paid for lending anymore; just threatening to pull it won't work for long, eventually it will need to be pulled to perpetuate the squeeze, can't just be bark there must be bite - There are tough old dogs in this game a manicured poodle won't scare them off. The other thing is just silly.

How about this instead:
UPDATE: KaloBios to Receive Gross Proceeds of ~$8.2M in Exchange for Issuance to Investors of 280,170 Shares of Common Stock of Company (SENTIMENT:KBIO:0)
Offering @ ~$29.27/share
? 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.


... So if co just issued shares in OTC transaction w/ private party to close out a desperate short position, it is dilutive to an extent but assuming the equivalent of retiring the same amount of shares in a balancing transaction, co. just collected 8.2mm$. If there were 4.12mm shares outstanding previously, the co was valued at ~70c*4.12mm = ~2.9MM$ when he bought in, so somewhere somehow, co now has 4.4MM shares & a newly found 8.2mm$ hence ~$1.86/share in cash. Ah-cha-fuc#ing-chin. If they can do more such deals the cash will pile up in the treasury then just wind it down and take out the cash :p
 
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