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I listened to the replay. It can be heard at (877) 870-5176 using Replay PIN Number 10032444.
Out of the four centers one has completed its quota. Instead of the 32 patients needed in the study ECTE may end up enrolling around 40 patients due to some leaving earlier than 24 hours needed for a valid case. Mooney hopes to conclude the study shortly.
Number of patients needed for FDA study was requested. ECTE was pleasantly surprised by the FDA answer.
Did somebody listen to the cc? They still do not have a replay up.
Seeker
"We are very excited about the prospects of helping patients and the healthcare practitioners who treat them, while building value for our shareholders."
What is Mooney talking about? He is not building shareholder value. He has completely decimated it.
Adi2,
I agree with you. Execution is what is needed. The lack of posts shows how the interest in this stock has evaporated. Even given the current status the stock is deeply undervalued. With time we should see it go up. I would not be surprised if it goes upto $7-8 rapidly. We need some decent news to give it the push.
Seeker
Adi2,
I agree with you. Execution is what is needed. The lack of posts shows how the interest in this stock has evaporated. Even given the current status the stock is deeply undervalued. With time we should see it go up. I would not be surprised if it goes upto $7-8 rapidly. We need some decent news to give it the push.
Seeker
The only new item in the mid year report seems to be that partner will be decided after EU approval. They mention cost savings, but none are described. If Mooney had said I cut my salary by 30% to save the company it would have been something. But this guy loves his salary $650,000 salary whether the company survives or not. What does he care? It is just shareholders money. For a company so close to running out of cash his salary is outrageous.
Seeker
Sad to say, but it seems that the Wall Streeters wait to buy until they have flushed us out of the stock. porgyrusty you were the unlucky one this time. It just feels so sad to have sold out at the bottom. I have experienced it a few times too.
Looks like we have reached the limit of pessimism. We should see a bounce up from these prices next week. JMHO.
Don't be so sure that being low priced is always a bargain. The company has to pay the high salary of Mooney. They burn cash constantly. If they cannot raise cash again the company can go to zero because it cannot commercialize Symphony. If the market cap is too low (like now) the company cannot raise cash. Also the market cap is not 12 million, but 27 M since now we have ~ 11 M shares outstanding (old 6+ and new 4+).
What I do not understand is how a public company CEO can be this bad and still survive. Mooney has messed everything - Investors, wall street, partners. The company image has been destroyed so bad that it is close to bankruptcy now. That is why the selling continued below $2.70. Still the board lets him remain. The stock price better rise to $5 level where raising cash will remain possible, else it will fall to zero.
ECTE is just plain disgusting - I concur. There is a limit to be disgusting and ECTE has crossed it. Fell from over $10 to now 2.5 and still no recovery at all. Mooney is to blame.
Seeker
The offering was supposed to close today. Did Aegis find enough takers? Is this price below $2.70 an indication that they could not find enough buyers? We should know by tomorrow.
Could you describe what happened to BPAX?
Some stop loss selling may be seen below $2.70. A bigger problem is if Platinum decides to teach Mooney a lesson. Platinum has lost from over to $10 to $2.60 now. They are a big outfit and Mooney has really made them mad. They can afford to lose money. If they decide to teach Mooney a lesson, they can sell to 0. The only thing stopping this problem is that Platinum is generally quite a sensible investor.
To me the real issue is not to price the company based on expectations of a final ? sale. If everything goes perfectly the company should be priced much higher than the current $27 million including recent dilution.
The real issue is will the company actually be able to commercialize symphony given its track record. The track record is mixed. Reasonably good execution has been seen on the technical side of bringing Symphony to fruition. The management record is horrible. We clearly see mismanagement of finances, totally failing grade in creating shareholder value and poor record in working with partners(Platinum). This much is obvious. Given this track record will the management be able to bring the company to profitability with current finances. My answer is a clear "No chance". More cash raise is certainly needed.
My prediction is that ECTE will be finally successful just because Symphony is such a super product. However, I also think that the management will create many more missteps before final success is acheived. These mistseps will be probably be in the form of:
(1) Missteps in future cash generation
(2) Problems with marketing partners
(3) Problems with Wall Street, such as trying to attract institutional investors and financing through them
Despite these anticipated problems, I still think that the comany is way undervalued. Today's Seeking Alpha articles advises investors to run away due to management problems. While acknowledging management problems I still think that the company at 27 million capitalization is way undervalued. I would not run. Instead I will buy some more at this price level. I think we will soon see a return to at least $5 price level.
Seeker
Echo (ECTE) Downgrade 06-17-13 by LifeTech due to financial mismanagement
http://lifetechcapital.com/ltc/category/covered-companies/echo-therapeutics-ecte/
LifeTech essentially echoes what we have been discussing in this board. Mooney has destroyed this company by mismanagement. That is why I had recommended that the board fire him without discussion. Instead his friends in the board decided to let him continue. Now the company will have to fight lawsuits. The mismanagement is by now obvious.
Still I do not think that the stock will go down further. Mooney may have done a horrendous job of financial mismanagement. However, I still think that given the excellent state of Symphony technology we are way oversold at this point. Once the offering finishes in a couple of days, the stock should bounce up from here. JMHO.
Seeker
I completely agree with porgyrusty and insideoutsideupside. Looks like we have a temporary bottom, but one can never predict a long term bottom. Particularly the attitude of Mooney not caring about investors is a serious problem. I think he will not hesitate to dilute investors again. In my opinion the right method would have been to raise enough cash at 0.75 to tide over until end of year. Instead he only raised 7 million because he used 3 M to pay of Platinum's loan. If at time of raise he needed to say lower the offer price to 0.65 to raise say 25 M, that would have been much better than this dilution. Now the market cap is so damn destroyed that he cannot raise more than 10M at one time.
Also the best option would have been to keep good terms with Platinum then all this capital raise would not have been needed because that was a credit line of 20 M. That was more than enough. Problem is Mooney will not listen to anybody. The destruction of relationship with Platinum is horrible.
Seeker
The downdraft happene becaused apparently some people knew what the new offering price would be, or it is also possible that they wanted to short the stock so that the offering price will be low. The idea of shorting was that they could short at a higher price and then buy the stock back at the offering to cover their short position.
Now everybody knows the new offering price is and we are already at the offering price, so it makes no sense to sell the stock below the offering price. Essentially a bottom has already formed. I think the selling must have happened with a lot of stock being sold short. Now those shorts have two options - buy the stock back at the offering and close out their short position using the freshly bought stock. However, if the shorts are unable to participate in the offering, then they would have to buy the stock in the open market soon.
Another factor to consider is that the company has a very valuable technology platform whose value is much higher than the current valuation (including the new 4 M shares) of 28 million dollars. So I will also expect fundamental investors to step in once the offering date is past.
Seeker
Mooney won. Looks like Goldberg lost. Mooney has destroyed all our equity. Now 4 million shares at 2.7. Why could he not sell $20 million at 0.75? That would have saved all our equity. What an ego to destroy every investor other than himself and all the new ones!! He will reprice all his options, while we all lost so much money. The board must be his friends to let him do this!
I think there should be an announcement by the company after the close and before tomorrow's open based on the discussions in the board meeting today.
I doubt they will AX Mooney, but I do hope so given what has happened to this stock. More likely a compromise will be stuck between Mooney and Goldberg.
No matter how you look at it, the ultimate responsibility is that of Mooney. We do not know the whole story, but whatever it may be, Mooney is the one who is responsible for doing the right thing to keep the company on track. He has clearly not done that. He has created circumstances that have made the company lose its entire market capitalization. Now the market cap stand at about 15 million dollars. It is extremely difficult under these circumstances to raise $10 million that Mooney wants to raise, still Aegis is going around asking investors to raise more money. When your market cap is 15 M and you want to raise 10 M, the investors thing that the company is already bankrupt. In any case all investor equity is already almost lost.
So who is responsible? Clearly Mooney. So in the board meeting tomorrow I hope that the board decided to sack Mooney without much discussion. The proof of his mismanagement is already apparent. He has run the company into he ground. If the board does not do the right thing, all board members and the company will have to fight law suits for may years to come. Is that what a bio tech CEO is supposed to do? Fight lawsuits or bring products to the market?
Seeker
My guess is rumor of another secondary at 40 cents may have caused today's downspike.
Montaur has pulled their line of credit. However, they have no way to pull the preferred stocks and warrants, that will take a lot of time. The high priced warrants are useless.
First, let me tell you that I am also an individual investor like others. The only reason I know this is because I have a friend who is very knowledgeable and resourceful. He was kind enough to tell me what happened. Also I have known Michael Goldberg for several years and know how he operates. Michael is an ex-CEO of a biotech and knows very well how cash strapped biotecs become.
As you know ECTE has a very strong relationship with Montaur Platinum, whose contact is Michael Goldberg. Goldberg does not like how Mooney is handling ECTE. So before the 0.75 share offering Goldberg made an offer to Mooney. What happened between them is not known, one can only guess. My guess is Goldberg either (1) Wanted change in leadership of ECTE, that is replace Mooney or (2) Proposed that ECTE accept a partner in exchange for cash which would fund all the trials. Mooney refused. This argument became heated with no solution. Goldberg may have tried a proxy fight, but he did not have enough votes since Platinum’s ownership is limited to 10% due to filing reasons.
Anyhow when the fight could not be resolved Goldberg essentially told Mooney that he would have to return all the money owed under the line of credit. That is the reason Mooney had to rapidly go for the 0.75 offering so soon after the 0.95 offering. The money raised was used to pay back $3 million outstanding on the credit line. One thing to note here is that while verbally the line of credit has been closed, officially it is still open. If it was officially closed Mooney would have to report that to SEC since it is a significant event.
Wall Street people found out about this trouble and now know that ECTE does not have enough money. How did they find out? The prospectus for 0.75 offering clearly stated that the proceeds of the offering will be used to pay back the outstanding amount in the line of credit. This is very unusual. From now until Symphony starts making money ECTE needs cash to keep the company working, why would they close the line of credit which they had obtained with so much effort? Before the fight ECTE was well funded, they had $20 million line of credit and the proceeds from the 0.95 offering. That was enough to commercialize Symphony. Now they are short of money. So everybody on Wall Street understands that there will be another offering. It would seem that the new offering will be below $0.50 pre split or $5 post split. That is the reason Wall Street brought the stock price down from 0.75 to 0.50 level.
Platinum still has a huge stake in ECTE. They have equivalent of 15 million pre split shares in ECTE. So Goldberg is still trying to push a deal. It is unlikely Mooney will accept a deal given what has already happened. However, Mooney does need cash. Note that if Mooney does not strike a deal with Montaur or some other party, it will be very difficult to commercialize Symphony. Mooney is sharp too, he must be working on something.
Hopefully, this answers my questions. In my opinion what has happened is just sad. We all lost great deal of money we had invested in ECTE.
Seeker
Does anybody know answers to:
(1) Why did the offering at 0.75 take place so quickly after the offering at 0.95?
(2) These are times when ECTE needs cash, then why did they pay down all $3 million owed under the credit line to Platinum?
(3) Why has the stock declined so rapidly from about $1 to about $0.50? Specially the decline from 0.75 to 0.50 level seem unwarranted.
The answers to these questions are widely known on Wall Street I hate it when only the individual investors are in the dark. I have not been following this board properly. So somebody may have already posted the answers earlier without my knowing it.
If nobody is able to answer the above questions in 24 hours, I will post the answer myself.
Seeker
Due to long vacation I missed the quarterly cc. Does anybody know how big a trial is anticipated for CE Mark? I think ECTE by now must have told now many patients will have to be included in the trial.
They have to first announce that they have an agreement about what the European trial will be. Only after that the trial can start. I have not seen anything yet on what is needed for European approval.
Seeker
Thanks for the videos. They are a good advertisement. They also give little snippets of what we already know. However, my questions remain unanswered.
Seeker
I will try them in the evening at home. Thanks.
Thanks for your reply. All biotechs have this problem that they must constantly raise cash to fund operations. How has ECTE managed to raise cash in this period you have been invested in? Did they take benefit of higher stock prices in the intermediate period to raise cash? Have they periodically raised cash from the market by selling stock at below market prices? What caused this latest serious erosion in prices? The company seems worth much more than current prices. I would say they should be in at least the $2 range. $45M market cap seems really low for their achievement so far.
Starbux,
If you have no problems could you please tell us how long you have been invested in ECTE. I have been in it for less than 2 months and this up and down in share price looks shocking. In the current downturn I tripled my original holding in ECTE. However, I wonder how these 0.95 and 0.75 share offerings would effect the people invested over the long term. For somebody invested at $2, $3 $ 4 level all these new offerings at such low price would creat a huge loss on the original position.
Seeker
God. Once again. And not only that at such a low price compared to market price. What is going on with this company? Don't the officers have ownership? This will drop the price below 75 cents. Why are they doing it?
The only explanation I can figure out is that the company projects huge expenses ahead. They must have cash available to meet them. The brokers told them that such a big cash need cannot be met without a big discount to the market value. So the company is doing it since they need the cash desperately. The officers will probably revalue their options so it will not be a big loss to them. The only losers are current shareholders.
I think all the recent moves are technical. ECTE had been sold big time during the recent public offering. Then it climbed to relieve the oversold position. Now it is falling having cleared the oversold and overbought position. It was very disappointing to see ECTE go about the 50 day moving average so strongly and yet not able to keep above it.
Now I expect ECTE to form a base around $1 and stabilize.
Agreed. I must have been wrong. The market action looks very bullish. I would only like to see some volume. I have my initial position and will keep on adding as time goes by.
Seeker
In my opinion the letter released today was negative. We had hoped that the company may not have to run a trial to achieve European certification. The letter clearly says that we will need a trial. I hope the required trial is short. Secondly I was hoping for European rollout by mid year. The letter says expect that by end of 2013. So I think the morning rally was overblown. The stock will come back down once people understand the implication of the letter. Still I think 2013 will turn out to be a pivotal year for Echo. We may not see European rollout by end of the year, but it should be close. The company seems to be playing conservative in the letter. They have set low end goals and I hope that is with the expectation of exceeding all the goals set forth in the letter.
Seeker
This early exercise of over-allotment seems positive to me. First, it means that all shares on sale at 0.95 got bought without any problem. Secondly, there was a 45 day waiting period for exercise of over-allotment. In fact they did not wait for 45 days, instead exercised it on day 1. That means that there is good demand for ECTE shares at 95 cents.
I wonder who is able to buy these shares. It was said in the press release that the offering was to general public. However, I never see any way to buy such offerings. Maybe they are only offered to institutional investors.
Seeker
2013 is the year where ECTE should have its day. Early in 2013 Europe will clarify if they need a trial and if so how big the trial will need to be. Their expected trial size is between 0 and 50. If Europe agrees to accept the methodology based on previous trial data it will be a big boost to the stock. US will probably need a trial and is always more rigorous in device approvals. However, US approval is also currently projected in 2013. The issue with such companies is always money. They need several million dollars every quarter. So if Europe approval does not happen quickly, they may need to sell some more shares in the market which will drop the price even further. Take a look at ECTE long term chart, $1 is a very strong 3 year support. It should hold. I got into ECTE recently, so have not understood why the company is selling shares to public instead of drawing money from Montaur Platinum.
For further information please look at this report:
http://lifetechcapital.com/ltc/wp-content/uploads/2012/12/Morning-Note-12-05-12-ECTE.pdf
Thanks a lot. I am really grateful.
Apparently. I have seen posting on yahoo board saying that Patrick Cox has written about ECTE. I have personally not read a report.
Has anybody seen a recent Cox report. A link will be appreciated.