Enochian Biosciences: Miracle Cures and Murder for Hire; A New Prediction Market Lets Investors Bet Big on Almost Anything; A rare non-investing wager... on the Boston Celtics

1) Nate Anderson of Hindenburg Research once again demonstrated why I consider him one of the best activist short sellers in the world when he released this damning report yesterday, sending the stock of his target, Enochian Biosciences (ENOB), crashing 28% to $3.76, which still leaves it with a $200 million market cap.

Why it's not at zero is beyond me... You cannot make this stuff up! Miracle Cures and Murder for Hire: How a Spoon-Bending Turkish Magician Built A $600 Million Nasdaq-Listed Scam Based on A Lifetime of Lies. Excerpt:

• Last week, Enochian Biosciences' co-founder, "scientific founder," "inventor," and largest shareholder, Serhat Gumrukcu, was arrested by Federal authorities over allegations that he conspired in a plot to murder a Vermont father of six.
• The victim, Gregory Davis, was murdered on January 6th, 2018, just 19 days before Gumrukcu was scheduled to appear in court to defend himself against felony fraud allegations related to a 2016 deal with Davis. Federal prosecutors argued that the prospective merger deal that eventually resulted in Enochian going public served as a key motive for the murder.

• Enochian is a biotech company with an entirely preclinical pipeline of claimed miracle cures, vaccines and treatments for HIV, Influenza, Hepatitis, Cancer, and COVID-19. The company claimed last week that Gumrukcu "has had no formal role in the Company" and that the incident was "completely unrelated to the Company." 

• However, Enochian's own disclosures indicate that the company and its pipeline are completely dependent on Gumrukcu. Every product Enochian is investigating appears to have been licensed to it by Gumrukcu-controlled or affiliated entities or are otherwise based on his research.
• Unbeknownst to investors (but known to Enochian's senior leadership), Gumrukcu's latest arrest for a murder conspiracy is simply the most recent in a string of alleged crimes by Gumrukcu.
• Gumrukcu also currently faces criminal charges in his native Turkey where, in August 2012, he was arrested based on accusations of falsely posing as a doctor and charging a desperate family $275,000 to treat a terminally ill cancer patient, who subsequently died, with substances that a real oncologist would later describe as "useless."
• Gumrukcu then fled Turkey despite an outstanding arrest warrant. Three years later, in August 2015, he sold similar 'miracle' concoctions to the desperate parents of a young Pennsylvania boy who had terminal cancer. When the boy died after an initial $59,100 treatment, Gumrukcu refused to return the family's advance payment of $253,000, resulting in litigation.
• In February 2017, Gumrukcu was arrested by authorities after the State of California accused him of a slew of white-collar crimes, including fraud, identity theft, and check kiting – a total of 14 felonies.
• The company hired Gumrukcu as a consultant in April 2017, just 2 months after his arrest for the alleged crime spree.
• Despite the ongoing criminal proceedings, Enochian still moved forward with acquiring and taking public a Gumrukcu-affiliated entity in January 2018, describing Gumrukcu as the "sole inventor" of all of the acquired company's technology. The deal gave Gumrukcu and his related entities & individuals 50% of the combined company.
• As he awaited sentencing following a pleading guilty to one felony, Gumrukcu attended the Nasdaq bell ringing ceremony for Enochian, likely with permission from his probation officer. He was praised as Enochian's "scientific founder" at the ceremony.

2) Ninety-nine percent of the wagers I make are related to companies – investing mostly in publicly traded stocks plus a few private investments.

But, on occasion, I bet on other things when I think the odds are heavily in my favor...

For example, longtime readers may recall that I've made a number of bets on PredictIt related to political outcomes in the last three presidential elections, making tens of thousands of dollars for myself and my favorite charity, KIPP charter schools (I described the most recent ones in my November 9 e-mail).

So I read this Bloomberg article with great interest: A New Prediction Market Lets Investors Bet Big on Almost Anything. It tells the remarkable story of two 24-year-old recent MIT graduates who, against all odds, were the first to persuade the Commodity Futures Trading Commission ("CFTC") to allow a real-money for-profit betting site on world events. Excerpt:

Companies had been trying to introduce similar so-called event markets in the US for years, but Tarbert's agency, the CFTC, had always said no, arguing they were tantamount to gambling and vulnerable to cheating. Now the agency had reversed course, giving its approval to two 24-year-olds who would enjoy first-mover advantage in what could eventually become an enormous new asset class.

Within weeks of Tarbert's call, which a representative for him says was customary, their startup, Kalshi, raised $30 million from venture capitalists. "We believe this will be bigger than crypto," says Mansour, now 26.

Their site, Kalshi, is now up and running and allows bets of up to $25,000 on more than 2,600 events in a range of categories, mostly related to financial/economic matters (such as the number of Fed rate hikes this year, gas prices, the 30-year mortgage rate, inflation, etc.), but also other things like whether there will be another COVID wave in the U.S. by September.

I've found PredictIt to be a very useful tool in helping me think about the likelihood of important future events, so I look forward to using Kalshi as well...

3) Kalshi doesn't offer sports betting – a market that's regulated separately and already has many competitors in the 30 states where it's permitted.

In January, I earned a quick $9,388 in almost risk-free profits after online sports betting was legalized in New York State. In a fierce competition to sign up new customers, the websites (initially four, now eight) offered all sorts of free money and promotions, which I took advantage of, as I outlined in three of my daily e-mails:

• How I made 399% on Saturday (January 10)
• Another easy 72% (January 12)
• A risk-free $800 (January 18)

Unfortunately, however, the companies quickly wised up, and now the offers are much less attractive. You can still make a few hundred dollars if you sign up for some sites' $1,000 free bet offers, but you must make offsetting bets to make it risk-free (details in my e-mails linked above).

For existing customers, the offers are either non-existent or too small to be interesting – for example, a 20% profit boost (I'm only interested if the odds are enhanced at least 50% in my favor). Thus, I've cashed in almost all of my winnings.

But with much of the remainder, I've recently made a different type of bet based on a big divergence between the sports betting firms and my favorite odds site, FiveThirtyEight.

First, a little background...

I've been a big fan of the Boston Celtics ever since I grew up in New England during the Larry Bird era, when he led the team to three NBA titles in 1981, 1984, and 1986 (I went to Eaglebrook and then Northfield Mt. Hermon School in rural western Massachusetts from 1979 to 1985 before attending Harvard and Harvard Business School).

So I've been rooting for the Celtics during the playoffs this year, as they've beaten the Nets, Bucks, and Heat to make the finals, which begin tonight, against the Golden State Warriors.

At the midpoint of the season, the Celtics were at a disappointing 20-21, but then set an all-time record for teams with a losing record at mid-season, going 31-10 the rest of the way. The team's resurgence has been led by their tenacious defense, which ranked best in the NBA in both the regular season and playoffs according to NBA Advanced Stats.

You might think the hottest team with the best defense would have been favored to win it all at the start of the playoffs, but sports bettors didn't think so, giving the Celtics only a 12% chance to win the championship, whereas FiveThirtyEight gave them a 35% chance.

I like wide spreads like this – at least 20 points – so I bet $200 on the Celtics winning it all, getting +750 odds (meaning I'll get paid $1,700 total – so $1,500 in profit – if the Celtics triumph).

Having reached the finals, the odds today are, of course, much less favorable... But the Celtics are still underdogs, with betting sites giving them +140 odds, or only a 42% chance to win the championship, meaning a $100 bet would pay $240 ($140 in profit).

But FiveThirtyEight – using two different statistical models (player ratings and "Elo" forecast) – has the Celtics at 80% and 68% likely to win, respectively, far above the oddsmakers' 42% chance, so I bet another $1,000.

That said, discrepancies like this are rare and, in general, online sports betting has terrible odds (the house is usually taking a 10% to 15% cut) and is thus a sucker's game almost all of the time. So I want to emphasize what I've said before: If you choose to do it... be careful and unemotional, hopefully make some money, and walk away. Do not get hooked!

Best regards,

Whitney

P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.