Great points here. On the larger cap front, Palantir comes to mind. The company is sitting on gold bars (absolutely ridiculous, and they’re being sued over it) and over $1 billion in cash that just earns a ton of interest. The stock’s fanboys eat it up because it drives net profitability, but it’s completely missing the point as to the sheer inefficiency of excess cash, per your points.

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Exhibit A is probably US vs. Chinese mega-cap tech where US mega-cap tech ploughed excess cash into stock buybacks, in some cases borrowing to turbocharge buybacks, whereas Chinese mega-cap tech hoarded cash and continue to trade at very low enterprise valuations.

GLPG is standout among negative EV biotech in absolute dollar (or euro) terms: they have ~ $4.05B in cash or ~ $63/share vs. a historical annual cash burn of ~ $6.70/share dropping to ~ $3.70/share following the divestiture of their legacy business. The plan is to follow the well-proven playbook of biotech value creation: shovel the cash into the incinerator of business development; which if executed well, can generate life-changing returns.

The elevator pitch is that public investors are being offered the opportunity to invest in a biotech venture firm run by an industry (maybe minor) rock star who is grounded in science and likely has a world beating rolodex at what in retrospect may be a cyclical trough in biotech valuations.

But wait, there's more: manic LPs are offering to sell you their interests at a 40% discount to NAV!

Many investors, perhaps yourself included, will not find this pitch persuasive; nevertheless it is (mildly) interesting to observe that framing the opportunity in these terms maybe makes it more somewhat more appealing to professional investors, many of whom love buying at a discount, vs. "let me introduce you to Yet Another Negative EV Biotech".

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I know GLPG well and have owned it before; i certainly hear you, though you could have made this same pitch for the past ~2 years

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From your lips to God's ears! In terms of maximizing ROI, the only time you want to own any stock is immediately before it takes off to the upside.

I bought GLPG ~ 2 years ago based on exactly the faulty thinking that you described, and after committing the cardinal sin of throwing good money after bad, am currently nursing a 35% loss. But whether any stock was a bad investment yesterday - or two years ago - and whether you happen to be sitting on a gain or a loss today - is irrelevant to whether a stock a good investment going forward.

Side note: many investors appear not to understand that they are effectively buying their current holdings every day.

GLPG appointed Stoffels as CEO on January 26, 2022 and as Executive Chairman on April 26, 2022. These catalysts delivered 50% and 35% losses respectively; and that doesn't include the opportunity cost of not owning NVDA.

Announcing the divestment of their legacy business on October 30 didn't do much for the stock either; GLPG has essentially tracked the XBI since then. So why own tGLPG now if the original thesis was a bad one - and continuing to own a stock after recognizing that your original thesis was wrong is an even more unforgivable sin.

Owning GLPG today is effectively a bet on:

1. Imminent value creating deal flow; since the legacy business has now been divested

2. Improved biotech sentiment that will reward value creating deal flow.

Which is why many investors may prefer to buy more NVDA instead.

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