Why VIVUS Inc. Shares Spiked Higher

VIVUS shares soar after a 13-D filing from an investment firm notes there could be interest in taking the company private.

May 28, 2014 at 1:49PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of VIVUS (NASDAQ:VVUS), a biopharmaceutical company developing therapies to combat obesity, sleep apnea, diabetes, and sexual dysfunction, spiked higher by as much as 16% following a 13-D filing with the Securities and Exchange Commission from little known Aspen Investment which announced it may make a bid to purchase VIVUS.

So what: According to the 13-D filing, Aspen Investment disclosed a 9.65% stake in VIVUS and announced that it may make a bid to take VIVUS private for a price of $640 million, or what amounts to about $6.19 per share, a 33% premium to yesterday's closing price. As Aspen Investment's 13-D goes on to note, it's under no obligation to actually offer a bid for VIVUS, but assuming it can secure working capital and debt from investment institutions it expects to submit its offer to purchase VIVUS by June 13. Based on commentary from Bloomberg, VIVUS has no comment on the possibility of an offer.

Now what: While this upside is a welcome surprise for investors who've been slammed over the past year on weaker-than-expected sales of weight control management drug Qsymia, I am completely lost as to why Aspen would pay as much as a 33% premium for a company whose losses really aren't shrinking. Qsymia has thus far been a complete dud as an anti-obesity drug, and the possible approval of Orexigen Therapeutics' (NASDAQ:OREX) Contrave which has completed an extensive cardiovascular outcomes study (known as the Light Study) might make it the preferential anti-obesity drug choice among physicians. With few guarantees that Aspen will even follow through with its bid, or even get the funding for that matter, I would consider using today's pop to head for the exit if I were a shareholder.

VIVUS shares may have soared today, but it'll likely have a tough time keeping pace with this top stock over the long run.
Give us five minutes and we'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information

Compare Brokers