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I do not have a crystal ball obviously. But a dead-cat bounce might come in the mid 2s. If that support breaks, it could go back to mid 1s.
But this stock is fundamentally worth nothing to me. I figure a new promotion campaign might boost this stock sometime in the future and that's when a new short opportunity will arise.
What a fun ride on this stock! The following was what I wrote about OPTT back in August. Click on the message I'm replying to to conform:
It's going up because of stock promoters. One day they are going to dump and that's when the stock is going to drop to ground.
It's going up because of stock promoters. One day they are going to dump and that's when the stock is going to drop to ground.
Exactly. This stock is going to zero!!!
Strong Sell - 85% Downside - Connected To A Vast Network Of Stock Promoters
Disastrous Financial Performance
Stock Promoters involved have a terrible track record
And more on Seeking Alpha
Erratum
"The market is or will be pricing in 15 to 20x of future cash at any time."
In 2008, this stock traded at $180. Shares outstanding back then was 10.2 million. So the market cap was 1.8+ Billion. 1/20 of that would be $92 million. 1/15 that would be 122 million.
Just look at when in the subsequent years OPTT has ever generated $92-122 million cash. It simply kept on burning cash year after year.
Nothing always works when it comes to stock market.
"The market is or will be pricing in 15 to 20x of future cash at any time."
In 2008, this stock traded at $180. Shares outstanding back then was 10.2 million. So the market cap was 1.8+ Billion. 15x that would be $27.5 Billion. 20x that would be 36.7 Billion.
Just look at when in the subsequent years OPTT has ever generated $27-37 billion cash. It simply kept on burning cash year after year.
Did that prove your statement at all? LOL.
OPTT will be burning cash for many years to come! Wake up!
100+% interest rate is the only factor that has kept me from shorting it. Moreover, the chart pattern has not given green yet. But the time will come in the next few months.
For a co. that generated only $705K revenue, $7.05 million R&D was certainly expensive. But that's far from all. SG&A was $6.7 million. An out-of-balance administrative structure. Officers are enriching themselves at the cost of shareholders. And even that paltry $705K revenue took a lot of selling to do. On top of those, there's also a $1.1 million litigation cost. A perfect recipe for shareholder value destruction. This won't end well. Just a matter of time for shareholders to wake up. It has happened many times to the co. before. You just need to check the long-term stock price chart.
Yeh, $975,000 versus $11 million burned in a year. A drop in the bucket!
"The Company cannot assure you that it will be able to secure additional funding when needed or at all, or, if secured, that such funding would be on favorable terms. These factors raise substantial doubt about the Company’s ability to continue as a going concern."
"The Company has experienced substantial and recurring losses from operations, which losses have caused an accumulated deficit of $177.9 million at April 30, 2016. At April 30, 2016, the Company had approximately $6.7 million in cash on hand. The Company generated revenues of only $0.7 million in fiscal 2016, and $4.1 million in fiscal 2015."
Straight from the company 10-K filing.
How monstrous can that contract be? And that was based on your expectation! The reality is: this co. burned $11 million in FY ending 4/30/2016.
Short of fortune telling, here are the hard facts or reality straight from the company's 10-K filing with SEC:
"Our financial statements have been prepared assuming the Company will continue as a going concern. The Company has experienced substantial and recurring losses from operations, which losses have caused an accumulated deficit of $177.9 million at April 30, 2016. At April 30, 2016, the Company had approximately $6.7 million in cash on hand. The Company generated revenues of only $0.7 million in fiscal 2016, and $4.1 million in fiscal 2015."
"The Company cannot assure you that it will be able to secure additional funding when needed or at all, or, if secured, that such funding would be on favorable terms. These factors raise substantial doubt about the Company’s ability to continue as a going concern."
The challenge for a short position is that the borrow cost is at 100+% (annual). But wait patiently. You might just get a chance to short the stock and have quick profit.
2 week to 1 month of consolidation. And likely a melt down coming. (Late September.)
Bollinger Band is tightening. After the BB tightening, a meltdown is likely coming. Very poor fundamental. The only thing that floated this stock is a dream beautifully woven by the management. Even government won't be able to save this company. Shareholders are set to experience huge loss in the next few years, just like those in many of the early solar stocks. The wave/tidal energy technology will become popular one day, only that companies like OPTT (and their shareholders) are going to be sacrificed for the course.
Congrats for hitting your target. I'm thinking possible shorts when the rally runs out of steam. Too busy these days. Have yet to read its ER transcript. Have you listened to it or read it? What're the key things. Would be great to know before I find time to read it. Thanks.
Not sure when but $11 target is rational based on oversold bounce.
Near term shorts should cover now. Move on to greener pastures.
Thank you Karin. We count on the company to deliver another decent quarter and put the stock back to the right track.
The $2.61 per-share-price was a based purchase price set by the volume weighted average closing price for the 15 trading days prior to and including July 8, 2016. Actual sales price is adjustable upon certain events. When I have time, I have yet to study the purchase agreement to understand the exact purpose of the Mr. Xue - Future World transaction. That's probably more important than the price itself. So, I agree with you in the complexity of the matter.
On the other hand, the recent TSD and NSR investment in the company's subsidiaries could be just smoke and mirror. They could be designed to jack up the stock price. Just maybe. Not sure about it.
You have such a convoluted corporate structure for such a simple operation. It's beyond bewildering. You also have got auditor dismissal and delayed SEC filings. You have this accounting fraud argument from years ago. And you have security dealers in China collecting 56% commission selling its ??????. A total mess.
Its registered CA sales office has zero operation after seven years. And the company is now touting about a "global trading and marketing platform." Sounds really "exciting."
I could be too cautious on this. But I certainly wouldn't buy it at this price, just like you.
Would be happy to listen to where I got that wrong.
On July 10, 2016, Golden Dawn, SP International (together with Golden Dawn, the “Sellers”), Fortune Capital, Fancylight Limited (“Fancylight”), Yongke Xue (“Xue,” and collectively with Fortune Capital and Fancylight, the “Parent”), Future World Investment Holding Limited (the “Purchaser”) and Pei Lei (“Pei”), as the sole stockholder of the Purchaser, entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”). Pursuant to the Stock Purchase Agreement, the Purchaser agreed to purchase an aggregate of 2,050,851 shares of the Issuer’s common stock (the “Seller Shares”) from the Sellers for an aggregate base purchase price of US$5,352,721.
Source: here
US$5,352,721 / 2,050,851 = $2.61
Stock Purchase Agreement $2.61 per share
$2.61 is the value CEO and management deem fair for this stock. Now trading at a crazy $12.5
International sales might be smoke and mirror. Security dealers ripped off investors by charging commission of 56% in China. Recent hype most likely related to illicit speculator rumors. Accounting fraud can't be ruled out either.
This won't end well. No shares to borrow for short though.
Sell on Rally Play Near Term
Great balance sheet. 100+ million, multi-year related party license agreement payment in Q1. But not going to be profitable for years to come. The company's Microbiome Therapeutics might also have been over-hyped.
Near term short. Could be short-on-rally swing trade candidate over the next few years too. Be opportunistic.
Willing to change view as we go.
ERBB and HEMP are both far too small for me to trade. MGT looks like a "short on rally" play. But its borrow cost is now 94+%. I let it pass a while back due to the borrow cost. Hard to borrow also.
MCRB fell almost 70% on Friday. It's a microbiome therapeutics company. Interim P2 result for lead product failed. It's a near-term short-on-rally play. Borrow cost 1.9% or so. Just received a >100 million royalty payment in Q1. Strong balance sheet. Won't short it long term. But I won't go long until it nears profitability, which is years away.
I'm also studying more carefully if the fraud accusation on SPU years ago had merit. But for a Chinese stock that has delayed 10-Q/10-K filings, dwindling profit and also rallied 5 or 6 times in the past couple of weeks it looks a good short. Actually I shorted it a few days ago but have covered. Borrow cost spiked in the past couple of days to now 75%. But I normally short stocks as near-day-trades. So sometimes high borrow cost does work for me.
From now on, I think we should move this kind of discussion somewhere else. Otherwise, other people on this board is going to get annoyed.
Good luck and keep in touch.
"he has managed to build a little business for himself as a public outlet of unvetted material written by others"
That looks quite likely. And that's of course very smart for his age. Just by being others' facade to bring CDXC stock down, he got to be on Forbes' list of "6 Under 30s Who Made Their Mark By Age 23"!
It does make sense for OPK to acquire CDXC. This is in particular if Niagen does go on to become a blockbuster and a widely-used tool to improve health and reduce sickness. In that extreme case, a lot of pharma businesses (possibly including OPK's) are getting crippled. Not my base case just yet though.
But I actually think CDXC a perfect fit for DSM. It intrigues me that DSM is a strategic investor in CDXC, has someone sitting in CDXC's Scientific Advisory Board, and also has a former executive as CDXC's VP of Sales & Marketing. And CDXC's business fits naturally in a DSM division already!
Tiger X Medical, Inc.
Great observation on this one. And this seems to be important observation.
5/9 He sold his PGLC holding for $11.1 million (likely through private transactions)
5/10 He acquired Tiger X holding for $11.5 million.
This proved the idea that he needed money to fund new endeavors.
For CDXC, there's no similar single-transaction pattern. But based on date, part of the fund might have gone to OPK, and maybe IDI (tiny purchase though) to lessor extent. Of course, he might also have near-term need regarding his philanthropic foundation also.
Thanks for the tip, kind words, and encouragement. I will try.
My pleasure. Glad you read :)
Hi Longtrade,
My current longs are just CDXC, LGND, NVDA, COST, ROST, TJX. (Besides, I hold ETFs IBB and ITB.) I'm reducing them (except CDXC) as their share prices increases. Other than that, I'm mainly doing short-term short-side trades, close to be day trading. If you have great short ideas please send them to me. I also have plenty of cash at this point.
On CDXC, I'm expecting a decent Q2. I have posted what I called expectation for a ho-hum quarter. However, beneath the surface, that kind of ho-hum result is actually a bit exciting.
Ex. special interest charges:
EPS = $0.009 to $0.014
With reasonable assumption about stock based comp and D&A expenses, here are the corresponding adjusted EBITDA
Adj. EBITDA = $1.27 million to $1.47 million.
QoQ growth = 45% to 68%
YoY growth = 213% to 264%
1H YoY growth = 635% to 705%
Management should emphasize the QoQ and YoY growth rate on EBITDA, if the result turns out to be within or near this range. Quite impressive actually, as you can see. If presented this way, the stock should be able to break out above its 200 and 50 EMA quickly.
I also have a blow-out scenario:
Ex. special interest charges:
EPS = $0.025
Adj. EBITDA = $1.90 million
QoQ growth = 117%
YoY growth = 369%
1H YoY growth = 852%
Management should again highlight adjusted EBITDA growth rate.
I believe institutional investors should have been crunching numbers at least just as we are doing. So, the blow-out case would send stock rallying 30-50% in days or weeks. I do not count on this blow-out scenario though. Stars have to be all aligned right for this to happen.
Turning to a less upbeat topic, the largest shareholder (Dr. Frost) of CDXC reduced a total of 1.378 million shares. His ownership is now about 9.8%, although his latest SC 13D/A filing indicated 10.47% as of June 21.
The market rightly shrugged the news off. Basically, Dr. Frost has been reducing his holding in other companies to fund share purchases in his own company, OPK, and to a much less extent, one (IDC) he is a Vice Executive Chairman. He is NOT a director with CDXC. He is just a large shareholder.
Just in case you need to have the knowledge. (The more you know the better, of course.)
You all have a nice weekend too.
Hi TWER, it all depends on your expectation.
I looked a bit more into TWER, it does look like a potential short-term turn around long play. (1) Wireless assets that can be monetized and not reflected in balance sheet, (2) Q2 operating metrics expected to improve significantly.
Management is talking about going to adj. EBITDA positive. But I'm not sure if they can make that happen in Q2. In Q1, adj. EBITDA was $-2 million, or $-3.3 million ex. gain on sale of assets.
Cash likely to be at $9 million level when Q2 result is out. At $2.5 million cash burn rate they forecast for Q2, this could last 3 quarters at least. It should be a short-term trade only.
Will be pondering how to profit from it going forward, long or short. Thanks for your tip on this stock.
Thank you, LongTrade.
A brief note on TWER. Weak balance sheet. Long-term debt is 86% of assets. Co. sustained operation mainly on a huge debt financing ($31M) in 2014 and a huge equity financing ($30.5M) in 2013. Burning cash year after year. Now down to about two quarters worth of cash. I actually think you are more likely to make money by shorting spikes or rallies. But maybe you are only day trading. Then nothing matters.
In comparison, CDXC is now debt free. And it's beginning to be a cash generator now. It's gross margin and operating margin are both on the rise. Financial metrics have improved dramatically over the past couple of years.
BPI Sports will soon be rolling out their Niagen-based dietary supplements in major retailers like Costco, Walmart, Walgreens, Target, Miejer, Kroger, Publix, Vitacost, QVC, Home Shopping Network, Shopko, Ahold, eVine Live, Ulta, and Wegmans.
And the company is in talks with major Fortune 500 companies for including Niagen/pTeroPure in high volume, non-supplement consumer products. They already have an ongoing JDA with P&G the might bring in milestone payments and recurring revenue in the future.
It seems they are gaining momentum. If they are successful, CDXC could be worth a whole lot more than now. Ingredients companies are generally awarded quite respected P/E multiples.
So, yes, CDXC looks more like a long-term or short-term play on the long side. But again always do your own research. It's still small and bears following closely. Adjust your stand and position regularly based on business fundamentals. There will be a lot of swing trade opportunities too, although volatility is getting reduced for now.
Good luck to you too.
Thank you too. My average price is now $3.70 or so. I got in at $5 plus first in May, when I first found out about this stock. But I was decimated by the short stock on June 20th. Following that I added more from $2.80s all the way up to $3.80s. I have no plan to increase my holding on this one for now, because I have a strict sizing limit on any small cap and microcap. I will wait for my swing opportunity to reduce it high and then possibly I will add back when it retreats, subject to my sizing limit.
Good morning, LongTrader. Thanks for sending this my way. I will look into it and share my thoughts here.
Meanwhile, I'm long CDXC. Their earnings release should be in mid Aug. A short attack (which I believe misplaced) brought this stock down. But this company is a patent-protected producer of Niagen, or Nicotinamide Riboside (NR), a newly discovered form of vitamin B3. Niagen promises to improve cellular health, slow down/reverse aging, and help with healthy aging. It's also good at treating a lot of diseases.
A good article that hypes CDXC can be found here. He also penned another one here.
Human clinical trials are ongoing. But vendors sell Niagen as supplement.
This company has a Nobel laureate (who's dad was also a Nobel laureate and early researcher on NR) on its Scientific Advisory Board. Its major customer, Elysium Health, sells a supplement called Basis (using CDXC's major ingredients Niagen as well as pTeroPure). Eysium Health has 6 Nobel laureates on its scientific board.
CDXC has just turned profitable. Search for NAD+, Niagen, Nicotinamide Riboside on the web. Search for Amazon.com for Niagen and read customer reviews.
Always do your own research and welcome to join the CDXC board for discussion. You can raise questions there, and I will be happy to answer them. Also welcome to read all previous posts, including mine, there.
I wouldn't chase these small Chinese stocks. But recently there appears to be a new wave of China small cap revaluation. How long will this last? When the stocks are way up, Muddy Waters etc. probably are coming back. So enjoy it when you still can. The reality is that you can't tell which Chinese company is legit.
In my blow-out quarter scenario,
Revenue: 8.48 million
This is the same as my previous high-end revenue figure.
But now a bit more ingredient revenue that pushes up GM, and also far better operating leverage.
Net income $672K
EPS = $0.018
After excluding special interest charges:
Net income $953K
EPS = $0.025
So an EPS of $0.02 really qualifies as a blow-out quarter. And stock should respond accordingly.
Don't count on this blow-out scenario though.
Just my humble 2 cents. (That hopefully translates into Q2 EPS of 2 cents :)
BPI Added the ChromaDex® Quality Verification Seal to Its Products
BPI SPORTS EXPANDS THIRD PARTY-TESTING AND QUALITY VERIFICATION TO BEST CREATINE™ AND BEST BCAA™
July 27, 2016 PRNewswire
Side Note:
We have survived the Dr. Frost fiasco today. The price action today is an indication that remaining shareholders are not really bothered much by CDXC's distracting major shareholders. They are now focusing on the company's business.
Though I do not expect it, a Q2 EPS of $0.02 should send the stock flying. But any positive net income, EPS and cash flow should be construed as sound result. Management should at least provide great positive qualitative outlook on the conference call. In that case, the stock should still resume its gradual upward movement.
Grease, I like your Signal/Noise argument.
On Q2 expectation, I'm setting it quite low. To me this could be a transition quarter that's not too exciting.
FWIW, here are my low numbers:
Revenue: 7.93 - 8.48 million
Net income: 46 - 247K
EPS: $0.001 - $0.007
Culprit: special interest charges due to the payoff of the Hercules loan. Were I to be proven correct, everybody should get beyond the headline numbers.
After adjusting for the special interest charges (but still leaving share based comp. in place):
Net income: 327 - 529K
EPS: $0.009 - 0.014
So basically both would be $0.01 (ex. special interest charges). I included third decimal digits just to show difference.
Unlike Q1, however, operating cash flow should be good.
I would be very happy to find out I'm wrong and you are right, after the earnings release. Let's all hope that way. But let's also get ready for a ho-hum quarter.
Going beyond Q2, at some point we should begin to see BPI contribution. Hopefully things would get really exciting then.
Yeh, I think the only credit I can gave to BSR is the bargain opportunity that's created. When this stock is back at $6 again, we might all be looking back and saying thanks to him.
I really wish similar short attack occur to NVDA, LGND, COST, and alike :)
The "Honig Syndrome" might turn out to be profitable distraction. Even though this stock will ultimately be driven by the success (of lack) of Niagen/pTeroPure, etc.
On Q2, an EPS of $0.02 should be thought of as extraordinary. The operating leverage is just beginning to show its existence. Growing revenue should be falling to bottom line rapidly, as Niagen scales up in the next 12-18 months. We should be adapting our views as we go along.
I give credits to short sellers and have shorted with them at times. But I can't give any credit to BSR on the CDXC piece. It's a piece more about other companies and their links with Honig. When it comes to facts about CDXC, it's ridden with errors. They didn't even care to read 10-Ks and 10-Qs carefully. They didn't even know about the reverse stock split. Or they are deliberately distorting.
What kind of work was that?
Look at how much on the ground work Muddy Waters or GeoTeam put into. That's called quality work!
In contrast, the BSR piece was merely a fear-mongering piece. It was more like a terrorist attack in the investing arena. You can't just generalize and GIVE every short piece credit.
And it's wrong when someone certified to SA that he wrote the article himself when he actually didn't.
If you are really providing a service, you don't lie. If you are a liar yourself, your words and works are questionable.
Really glad to hear about that. We always have good and bad trades. Think of bad trades as a cost in this business. What really matters is that our winners overcome losers. A great trader is also one who learns from his/her own, as well as others', winning and losing trades.
Dr. Frost sold 300k shares through Frost Gamma Investments Trust, and 811k shares through Phillip and Patricia Frost Philanthropic Foundation. Both appears to have occurred on June 21st, after the BSR attack. So there's a test in the day on the stock. It would be a big positive if the stock can manage to close unchanged or even go slightly positive. Hope it just continues its BB tightening process.
Frost likely didn't like the price reaction to BSR attack. So he reduced exposure slightly. It is also conceivable that his Philanthropic Foundation might have a near-term fund need. So he couldn't afford to subject all of it to near-term volatility, thus why he reduced ~1/4 in that part of holding which was also the bulk of the reduction.
Furthermore, he likely needs money to continue his purchase of OPK shares. Lakewood Capital pointed out back in 2013 that Frost knew that he needs to keep on purchasing OPK shares. Otherwise, the stock could collapse. He's been out there buying OPK shares in the open market for years. And his stake in OPK has now grown to over $1.8B worth. So he just can't afford to stop. One might reasonably suspect that he liquidated his entire Pershing Gold holding in May at least partly because he wants to fund his ongoing OPK share purchases.
The notion that Frost "knows something" when he buys or sells shares is a myth. That's according to Lakewood, who pointed out that despite Frost's continuing purchases of OPK shares, the company's endeavors continued to fail miserably. Dr. Frost's share purchase is merely a reflection of his own belief that he himself is capable of making OPK a great success in the end.
Now that's the company he runs himself. Regarding CDXC, he is not even a board member. He is just a major shareholder (still 10+% after the reduction). So no, he does not know something you don't about CDXC. Oh, that's assuming you have done your own research on CDXC.
It's now obviously that Dr. Frost was unlikely part of the early June $5.25 million registered direct offering. That commitment most likely came from Honig/Brauser, if I have to guess.
Assuming Honig gets what he wanted, will he go after those other short sellers next (and maybe spare Drose instead)?
Also, now that words are out Drose didn't write the piece himself could SA be doing something about this? I believe there are a lot of short-article authors who follow similar practice. Long-article authors are likely more independent and original, for obvious reasons.
InvestorsHub charges for private replies.
I do not want to pay for that privilege. I would rather use that money to pick up a few more CDXC shares. SA does not even charge for that. So there's no reason I'm going to pay IH for that :)
So I do apologize to any of you who have sent me private messages today. I have read them and agreed with you. But I'm no longer able to respond in private. (My free trial is probably over now.)