Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Well if one looks at the recent developments, I am pretty sure that the company is on the way up. Definitely not on the way down.
It is the pps which gives us the wrong impression. Yes no doubt the financials need to improve further but they are improving and not getting worse.
The other thing that the author says is that if a company is planning a RS remain listed on the bigger exchanges then that is not good. However, if a company is planning a RS to uplist from an OTC to a bigger exchange, then that is a good sign.
The only issue now is to see whether they succeed in getting to the Nasdaq or NYSE.
Uplisting to a bigger exchange.
Here is an interesting article that throws some light on some of our concerns regarding the uplisting. The author feels that it is a positive sign for a penny stock.
Investing Opinion Return to Article
How an Uplisting Works
Rick Pearson
04/14/10 - 12:30 PM EDT
Questions I've received about the timing of the potential uplisting of Biostar Pharmaceuticals (BSPM), one of my two favorite potential uplisting plays, makes it clear to me that many people hold a number of misconceptions about uplistings.
So let me post a few facts in response to specific questions people have had. Some of the questions have related to Biostar specifically and some to uplistings in general.
The complete rules for listing on the Nasdaq can be found here.
Fact No. 1. Uplisting isn't automatic. After a company meets all of the requirements for an uplisting, including financial requirements, corporate governance requirements and share price, it is still up to Nasdaq or Amex to give final approval. Sometimes, as in the case of SinoCoking (SCOK), this happens almost immediately. Other times, as in the case of Subaye (SBAY), it can take a number of weeks. The conclusions are that timing on uplistings is uncertain, timing depends entirely on Nasdaq approval, and it pays to be patient. Because I missed out on the massive Sinocoking run and a few others, I typically try to get in early and then be patient rather than waiting until it is too late.
Fact No. 2. The required share price to uplist to Nasdaq is $4. The price is determined by the bid price, not the closing price, of the stock. In April 2009, Nasdaq lowered its share price threshold to $4 from $5. This was presumably due to the impact that the financial crisis had on share prices, but could also be seen as a move to take some business from the Amex exchange. Both the Amex and the Nasdaq charge substantial listing fees to companies for listing on their exchanges and both are eager to maximize revenue. Amex has a lower required share price of $2 to $3 for an uplisting.
The requirements for an Amex listing can be found here.
The reason that the bid is used instead of the closing price is that the bid more accurately reflects demand for the stock and is hard to manipulate, unlike the closing price, which can be influenced by a single trade. However, if the closing share price of a company is right at $4, then chances are that its closing bid was below $4. So looking at share-price histories alone can be misleading.
Fact No. 3. It doesn't take 90 trading days with a bid above $4 to uplist to Nasdaq.
The 90-day misconception comes from the fact that some companies that are not yet profitable and that lack an adequate operating history can still list on Nasdaq, but only if their bid price is above $4 for 90 consecutive trading days and if they meet other criteria.
This doesn't apply to profitable companies such as Biostar. Again, a good example of a much faster uplist is Sinocoking, which took only seven consecutive trading days after the time it traded at $3.50 on Feb 9 to the time it announced its uplisting on Feb. 19. However, as always, Nasdaq reserves the right to take longer than this based on its own criteria.
A separate misconception is 30 days. The 30-day misconception comes from people getting confused with the delisting requirements of Nasdaq. The 30-day trigger is the delisting trigger, not the uplisting trigger. When a company trades below $1, such as Sirius XM (SIRI) recently did, it gets a letter from Nasdaq that says something like this:
"On September 15, 2009, Staff notified the Company that the bid price of its common stock had closed at less than $1.00 per share over the previous 30 consecutive business days, and, as a result, did not comply with Listing Rule 5450(a)(1) (the "Rule"). In accordance with Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until March 15, 2010, to regain compliance with the Rule."
(Note: Given that SIRI has a market cap of nearly $4 billion, it is unlikely that it will be delisted and more likely that Sirius will do a reverse split and remain listed).
Fact No. 4 . Reverse splits are a sign of good things for companies on the way up, but a sign of bad things for companies on the way down.
In order to meet the minimum share price requirements for Nasdaq, many companies will conduct a reverse split. This is perfectly acceptable to the exchange, and the post-split share price will be evaluated accordingly.
Using a reverse split to raise the share price and obtain an uplisting is a very positive sign for a company and is much different than companies that use a reverse split to prevent being delisted. Once again, the confusion relates to delisting as opposed to uplisting. Many people who don't focus on uplistings only encounter reverse splits in the context of companies that are trying to stave off a delisting, so in many people's eyes a reverse split is a sign of a troubled company.
For the relative few of us focused on uplistings, a reverse split is typically the first catalyst that attracts attention to the potential uplisting and is considered a very good event.
As for the timing on the uplisting for Biostar, that is solely up to Nasdaq. However, according to the company's chief financial officer, the company already meets all of the corporate governance requirements and has already applied to Nasdaq for an uplisting.
On Tuesday, Biostar's last aftermarket price was $4.35 and the closing bid was $4.30.
At the time of publication, Pearson was long Biostar.
Thank you Kav for your post, explaining your personal view point. Very well summarized.
I am quite of the same opinion but like you said, I am emotionally attached to this stock because I love the technology and feel that it is very relevant to the current era.
We just don't seem to be able to exploit it commercially. What has always foxed me is that we have announced so many partnerships over the last year or two with some very large and significant players in a variety of segments. Yet our revenues have hardly shown the kind of growth which I had expected. The % figures do not impress me now as they are with reference to a low base. We need some solid absolute numbers.
The RS worries me but I was hoping to see an increase in the pps to the mid/high teens, to consider an exit. Hope that happens.
Thanks again.
Appreciate your opinion Mike. Will try and control the urge to vent out.
From my talk with Debbie, I feel it will be the NYSE as she had vaguely hinted at it. Probably listing norms are also easier.
Mike - I know it does not help but I am only expressing my concern in a way. Have no other outlet for my worries. I am way to invested in this stock to have any other purpose.
I cannot accept that after all the positive PRs in the past two months and more, other than the news about the RS, we are where we are.
The least I would have expected is a rise to the higher teens after the MDA news. I am ok with the RS announcement too but why is the pps locked down in this range. With the kind of news that we have had so far, the pps should have gone up and the RS ratios should have only improved.
If the management is so upbeat about the future, if the results are better and the revenues are the highest in any quarter, what is holding the pps down? Why is the investing community not seeing it in a positive manner.
Whoever was happy that it has not fallen below 10cents, I hope is watching. Dreadful start. God knows where we end.
Either way SP these contracts are getting us nowhere. All of us were so desperately waiting to hear about the MDA news. We all thought that it will have the same effect as the DLA mandate news.
But look where the pps is today. No volume and stuck between 10/11 cents for weeks together. Just awful. Even the qly results have made no difference.
Just reconfirm a my gut feel that we will be held in this range till the RS.
Yes SP,
I didn't mean that either. Was just confirming that possibility. No one knows for sure.
I can understand your not following this board regularly. The amount of time I have been spending on this stock, following this board on a daily basis, has just not been worth the effort. Could have made more money elsewhere.
SP- What A1 is saying might be true for all you know. To support his case, if you had noticed, even the MDA Phase II award was known to APDN way back in Mar 2014 but they chose to announce it only last month.
They got away by saying that Defence orders are complicated and a lot of steps have to be completed before they can announce it. Same may be the case with the DLA mandate expansion.
Yeah CK. Debbie had hinted once to me that it might be the NYSE.
Yes WT.
The RS will increase the price no doubt but the uplisting is not guaranteed.
As is evident from the link posted by SP, one of the requirements does seem to be earnings. So for some reason if the uplisting does not happen, the RS will be an eyewash and of no use to us. It might only satisfy some investor seeking that $4 benchmark.
Will the management guarantee an uplist after the RS if they have done their homework and are sure they will qualify? Can hold them legally liable if they do not up list.
Thanks CK for your opinion. Guess that must be the case or else APDN can just not uplist.
WT,
From my call with Debbie about a fortnight ago, it was clear that they are going for the RS as soon as it is approved in the meeting on the 28th of Aug.
She had said that once approved, it could take them about a month to complete some listing formalities before they can be listed on either the Nasdaq or NYSE. Hence I doubt whether that can happen before the conference on 8th Sept.
This brings to a point about the RS. Is the management's interest genuinely to uplist or is it just to do a RS and get the price above $4/- I say this because many of us have presented conditions for uplisting which require the company to be profitable, which we are not. Regarding investment from larger funds/institutions APDN can meet the price condition of 4/5 dollars by simply doing a RS. Is being listed also a condition. Maybe not. This whole uplisting logic may be given to us only so that we approve.
Would love someone to throw some light on this.
True. I agree. Frustrating. Can't even exit at these levels. Have to wait.
Look at the pps. The great results seem to have had no impact at all. All the more convinced that we will be simply held here till the RS.
What the hell will it take to move this???. Highest quarterly revenues ever and yet no one is impressed.
Wow! Rochestor of all the companies. Good for us.
I don't think they shared any information on that aspect.
I agree with your logic A1 and I too held on to this company because I sincerely believed in the potential of their technology.
It is however taking them too long to transform the operations into a profitable one. I too should have sold when it hit 30 cents but I never imagined that we could go down so much after the DLA mandate announcement. My mistake.
A1- my concern is do you really believe they can get $1.3 million in the last quarter. Looks doubtful to me.
Ramping it up to $10 million looks even more difficult. In the meanwhile I am not sure how much more of dilution or reverse splits are we going to see.
Frustrating no doubt for someone like me who has been in this stock for more than 6 years now with zero appreciation. I have been living on pipe dreams unfortunately.
I think this debate over the company's performance is endless. 10 years from now, we will probably be discussing the same issues.
People who have been in the stock for long by then will be cursing and those that have just entered will see great promise in the stock.
I do believe a that the revenue ramp up should have been far more than what it is now. Their expenses are just mind boggling. Net loss figures continue to be disproportionately higher than revenues.
Mike - like A1 has said, they need to have a net income of 2 million and not just revenue of 2 million.
Today APDN has no income. They are making a loss quarter on quarter.
Sorry I say that because the uplist will be done as soon as possible after the meeting on the 28th of Aug. Hence that does not leave us with much time.
However, there is a general concern about whether we can satisfy the norms for getting uplisted.
Even that cannot happen. If that were to happen, we should have seen the trend in the past quarter's results. Look at the difference between Revenue and Net Loss figures.
We should have clocked more than a million dollars last quarter. $840,000 is hardly impressive.
Despite all the promise that this technology holds, this company has screwed up financials.
I hope that the RS is rejected. They have no place on the Nasdaq or NYSE with such poor financial control.
Profit in 90 days from where we sit today is a pipe dream. I mean look at our figures today. $840,000 in revenue and close to $2 million in net losses.
That's what is the reality Pasta. Well said.
It's the time element drr. We have seen this happening for too long.
We can't just continue to bank on the theory that if they are spending recklessly there must be a good reason. It has been a good two years now since they got the DLA mandate. A lot was expected then. The pps shot up to 30 cents.
But we have seen nothing spectacular happen since then. Only downhill in fact.
You said it right drr.
So many partnerships with great companies have been announced but nothing reported about revenues from these tie-ups. Their operations are a mystery.
True but I doubt this one will be any different.
We will hear the Dr gloating about how they have had a great quarter with highest ever revenues so far and how the future looks very bright.
Hell who cares about the present.
Yes Pasta.
A net loss of nearly 2 million in the quarter compared to revenues of $841,000.
At this rate of increase and decrease, when will we ever break even. And they talk of uplisting to the Nasdaq or NYSE. How will they ever meet the required norms.
Wonder whether they have any money left for the next quarter.
Once again not sure how to react.
Performance looks good only in terms of percentages with respect to previous quarters. Wonder whether this is good enough for uplisting.
One good thing though is that quarterly revenue is the highest ever. Good for publicity. Wish they had crossed a million.
Their burn rate is more than $4-5 million per qtr. A revenue of 3.3 will get them nowhere.
That is exactly what I have been saying for the past few days.
It almost appears as if they want the price to remain in the 10 cent range so that they are forced to use the 1:40 ratio. Wonder whether this is just to reduce the outstanding shares by a huge margin for some peculiar reason known only to the management.
Or else I would have allowed the MDA news to pump up the pps and then announced the RS. We could have easily been at 15 cents by now.
Has been very unlike past results.
No PRs no pumping. This one could swing either way. I hope that Monday springs a pleasant surprise for all of us.
Good luck to all
Very well explained.
Thanks Pasta.
A1- I don't add much value to what Debbie said. She does not have a choice but to say that it will be good for shareholders.
I don't think she has any real sense of what the financials are going to be and the challenges of uplisting.
If income is the condition, I can't imagine how they are hopeful of meeting the conditions and getting uplisted.
There is no way that the situation will change so dramatically in this quarter.
I am reminded of the song " Sweet Dreams"
Sweet dreams are made of this
Who am I to disagree
I travel the world and the seven seas
Everybody's looking for something...
Here's the link
One thing is for sure. The news of the RS took the steam out of this stock. Good or bad, it is certainly not helping at the moment.
As far as the future is concerned, it is a big gamble.
Mike- do you buy into my suspicion of us being locked in to the ratio of 1:40 for some reason? Why would one not want to pump it up a bit to get a more favorable ratio.
Is it that they want to bring down the outstanding shares by a huge amount. Maybe a condition put by someone willing to provide finance in return.
10.61 - Wow!! I guess they don't care.
Increasingly feel that they have locked in to the ratio of 1:40 for some ulterior motive. Results or no results. This way they are probably preventing people from exiting before the RS cause very few would like to sell at this low price.