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There are a couple of lessons that I find important to remember: First, the market is a full contact sport (Cramer's making no bones about that), and the second lesson is market participants can target a company with large amounts of capital to manipulate its stock price. A few million dollars here or there is chicken feed, even though it appears like a lot to individuals.
Although I would like to see some folks thrown into prison, in a certain way I'm not so bothered that NWBO has become a target of someone w/ an agenda (and I'm not convinced its short sellers); unfortunately that's just the nature of the game. What I'm bothered about is how poorly management has handled this particular challenge and has shown themselves to be light weights - the last capital raise was and continues to be a fiasco.
Yesterday was the first time I seriously considered selling, but decided that I'll just ride this out given nothing has changed with regard to how the science is viewed, and there's still plenty of expectation that the phase III for L will be successful.
Cramer shorted Apple?
That guy's an idiot.
I so hate Cramer
I'm not big into conspiracy theories, especially for explaining the long-term movement in stock prices. But we all know that in the case of NWBO, there's been a deliberate effort to undermine the company, its management, and its stock.
My beef is that management seems to have played into the hands of those that want to do the company harm. They've just not responded well and now the stock is a true penny stock with a market cap under $100 million.
Yeah, that's what we're all hang'n are hats on.
One of the unfortunate signals from today with the re-pricing of the warrants is the company effectively let the public know that they have no clue how long until results are known and the FDA comes to a decision per the halt.
Linda and Les basically said today: we have no idea what's going on, so let's take whatever cash for now, even if we have to price the longer term warrants at $1. That's basically a concession to the warrant holders to cash in the 96 cent short-dated warrants.
I've got to believe there are a lot of pissed off investors, including Woody. But there's not really much they can do other than reach for the Bat Phone to call Linda and Les to find out what's going on in the Bat Cave.
My guess is that any investor with a large position will keep their shares in place, rather than just capitulate and take a large loss.
Might as well see how this plays out to the bitter end.
There's a lot of compelling arguments in favor of NWBO terms of the science and where they stand with the EMA and progress with the U.S. trials. That's why I own shares in this company.
The problem is that management has been acting ad hoc. The decision making about the class A warrants for only 60 days, then extending those just another three weeks, and then resetting the exercise price along with the addition of new class D warrants are all signals this company is not acting with any clarity and any serious thinking about its strategic/financial planning. (Is the new exercise price for the warrants encouraging the short sellers?)
Management and the board just seems to be reacting to one thing or the other, whichever way the wind blows. They need to slow down and conduct some serious analysis over what their next steps should be. Otherwise, if they remain walking along this path, they will continue to kill the stock price, and then they'll eventually kill the company.
Today convinced me that management's best strategy is now to find a strategic partner or sell the company in its entirety.
I really, really want to believe in management.
But, Linda and Les make it very hard, just by virtue of what appears to be poor planning and execution, at least in my opinion. Today's resetting of the exercise price is not entirely unexpected, since the company has a need for cash through the next couple of quarters. But the low ball price is hard to fathom and probably something they could have waited to do for at least a couple more months via a new capital raise.
But what bothers me most is I never get the feeling that management knows where the company is at any point in time relative to whatever events they're expecting to occur. They totally miscalculate and shareholders get the short end of the stick.
Honestly, now I'm just betting on pure luck that something good occurs on the regulatory front.
Management now needs to seriously consider selling the company.
Correction:
Got the timing wrong. The number of common shares outstanding at year end was approximately 1.8 million.
The number of shares outstanding of the registrant’s Common Stock, $0.001 par value, as of March 8th, 2016 was 2,470,400.
That means U.S. Stem Cell doubled the number of shares outstanding to over 5 million, not in four months as I previously wrote, but (amazingly) doubled the number of outstanding shares in less than two months!!! Strictly my opinion, but this pace of dilution is unsustainable.
It's a variation on Murphy's Law --
If it can take longer, it will take longer.
Not wishful thinking at all.
"As of May 4, 2016, there were 5,042,656 outstanding shares of the Registrant’s common stock, par value $0.001 per share. "
This company continues to bleed shares of stock, seriously diluting common shareholders. This is a doubling of common outstanding shares in just four months. And this is having a dramatic impact on the decline in USRM's stock price, and a corrosive effect on the value of every share held by anyone that owns stock in this company.
Continued losses are primarily funded via very expensive factoring of receivables and convertible notes that are typically converted into common shares.
USRM once again received a "Going Concern" footnote that raises concerns by the auditors about whether company has the resources to continue as a viable company. As quoted directly from the 10Q for March 31, 2016:
A case could be made those terms were market, and would have been included as part of an entirely independent capital raise from a non-affiliate party that required a lock-up period.
It's fair to be concerned about the Fund gaming between the public and non-public company, but I don't really see it just based on those non-dilutive clauses. And, I really doubt that a merger has any standing to that issue - more like trying to kill a fly with a machine gun.
The transparency from the public filings is the best insurance against excessive insider dealing, to put a label on it.
Now I take back what I said yesterday about taking back what I said on Sunday. Lol
I really don't understand what Linda and Les are thinking. If you want to extend the expiration of the warrants, then first, why wait to release the news until yesterday at 5:00pm when the same news could have been released much earlier in the month.
I guess everyone feels that a +$3.00 share price has a good chance of being achieved within the next 21 days, which is good news. But the way this has been strung out just appears to be poor planning by Linda and Les.
You either want the capital from the exercise of the warrants, or you prefer to let the warrants lapse and make-up the gap in funding somewhere else down the line at presumably a higher stock price.
Shorts should be very nervous....
There are potentially three separate Big Pharma agreement that could be signed at any time. And the trial results look very promising.
Not a healthy situation for NWBO and investors to be adrift and for the stock to just move with the ETFs.
We'll see if management is holding its cards close to the vest until after the warrant period expire next week, but the company does need to show some encouragement to the market, or this will truly become a penny stock.
I get the sense that neither Linda nor Les have the first clue how to communicate and manage investor relations for a public company. They're certainly making investors nervous and playing into the hands of those that want to bash this company.
Gaming the process is possible....
If events unfolded late, NWBO could be withholding or slow playing positive information until after the warrants expire. That would both lessen the dilution from exercise of the warrants and give the company the opportunity to raise capital at a higher stock price later.
Just a thought.
It is investing....
And with any investment the investor has to weigh the risk associated with any company and its stock against the potential return on investment.
Clearly there is risk with NWBO, as there would be with any biotech stock - or any stock, period. However, when considering everything we know from the results of the trials and comments from the investigators, the conclusion (for me at least) is this is a very undervalued stock relative to its risk, and that there is a fairly high potential for a large return in the short-term (less than 12 months.)
It's really the only way to frame it.
I would go as far as to suggest the big boys have already offered validation, just by virtue of entering into and completing negations; albeit the news is unannounced and there is uncertainty about the closing or under what terms.
What's interesting is how much potential news is swirling around the company and what the potential is for the stock price should that news be even moderately positive.
Tipping point?