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And you're as sure about the BK in less than 30 days as you were about the R/S being approved in July when you were at the meeting? Like THAT sure? ...
@Monchu -- LOL Spoken like a tue EE! I can relate to that.
@torobravo - A very succinct illustration of dilution!! That's why I voted NO!!
@bobbodom - According to the materials sent with the consent statement, all votes must be cast before 8/28/17. However, I do recall reading in the fine print that that company could terminate voting prior to that (I'm assuming in the case that enough votes were received prior to that to definitively determine the outcome). My NO votes are already cast!
Call it what you wish, but I stand by my assertion and also by my original assertion that poinciamike misrepresented what the consent statement said. He said they WILL declare BK by the end of the month and implied that the consent statement said that. That is demonstrably UNTRUE as I showed.
@maberms: Understood - But look at the difference in degree between the statements made relative to BK and those made relative to the diltutative effects of the R/S. Which of them sounds more urgent?
@poinciamike: You made the statement that the company will go bankrupt without the R/S and referred us to read P.6 of the consent statement
This is what is on P.6 of the consent statement:
"Furthermore, if we have insufficient cash to fund our operations and clinical trials, we may have no alternative to filing for bankruptcy protection." (emphasis mine)
That is not a statement of certainty.
Elsewhere in the consent statement, on P. 11, we find:
"We cannot assure you that the proposed reverse stock split will increase our stock price and have the desired effect of maintaining compliance with NASDAQ Marketplace Rules."
And this: "Current stockholders will likely experience dilution as a result of the Reverse Stock Split" ... "Historically, in companies with convertible note structures, there is a trend for the stock price to decrease after a reverse stock split. This is likely as a result of the availability of more shares to satisfy obligations under these notes through conversions of the notes into shares"
And finally, we have: "We are unable to predict if, when and to what magnitude dilution will occur; however, there is a substantial
likelihood that significant dilution will occur based on historical data." (emphasis mine)
Now that last statement sounds a lot more certain than the "may have no alternative" with respect to BK.
These words are always chosen carefully. It pays to read them carefully.
@yamasushi - I agree. I made my initial investment in November 2016, but when I saw the insider purchase by Chung, I added to it. The important piece of info was that it was a direct purchase - not an option grant or warrant. A good resource I use to look at insider trading is www.openinsider.com
Nothing fancy - just a basic website - but easy to use and quite useful.
@ngsww - RSI above 70 is generally considered "overbought" territory if you are only looking at the RSI. However, it's not unusual during an extended rally for the RSI to stay well above 70 (all it really takes is enough sequential "up" days). The last 5 sessions have been "up" days (with the exception of 7/31), so it's not surprising to see the RSI at 82 right now. What this appears to be is a significant upwards breakout from the consolidation wedge that has been forming since early May of this year, with a strong support at about 0.27. We saw an earlier breakout attempt at the end of June that took us up to test the 0.30 overhead resistance range, but returned back to support by around 7/12/17. During that attempt, the RSI only got to about 51 because it consisted of only two "up" days on 6/30 and 7/3. This time looks to be different, because the upward move has been more gradual, but appears to have possibly broken through resistance. If we see additional daily closes above 0.30, that would be a strong indication that the 0.30 resistance level has now become support. In that case, we could expect the RSI to stay above 70 for a while longer. So far, the chart certainly looks like we have a "real" breakout this time, and a weekly close above 0.30 would go a long way toward confirming that, IMHO.
@fnyak - The full details are in the SEC filing. If R/S is approved, BOD can pick a ratio between 1:20 and 1:500 at their discretion. SH are only voting on whether to allow the R/S. Votes have to be submitted before 8/28 which is when they are counted.
@SAMNOTSAMUEL - No reason to believe they weren't going to try to do the 3rd R/S. The preliminary SEC form 14 indicated as much. However, it's also quite obvious that they must have already gotten the 180 day extension from NASDAQ, because the delisting deadline was 14-Aug, and the final vote tally isn't until 28-Aug. My guess is that if they did get the extension, one of the conditions of it being granted would have been that they attempt the R/S. That would have likely prompted today's finalized form 14.
@docprep - Therein lies the rub. The management team knows that if they get a BO, they won't be around long after that. They are trying to keep the gravy train on the rails. So far, the only thing they seem to be effective at is executing R/S's. That is not a path to long-term success. Given the value of Delcath's IP, it would seem reasonable to assume that there are interested parties. Especially, since there have been previous offers.
@PDenmark - What insider activity are you referring to? I'm unaware of any other than Tony Chung's 1.5M share options exercise / purchase that happened at the end of November 2016. Can you enlighten us further?
@SAMNOTSAMUEL - "Convince me why I should buy back in"? So, you don't have a horse in this race? What should it matter to you then if R/S is voted down? I might have been in favor of one -- except for the fact that they've done it twice already to the tune of 256X dilution, and what do they have to show for it? NOTHING!! To me, the facts are clear: If we trust the management to "right the course" by allowing them to do an R/S and getting their finances in order, we can be assured of further dilution because many longer term holders will probably bail (knowing what happened after the last 2 R/S), which will cause a selloff, possibly bringing the SP back down in danger of delisting again. The statements in the SEC filing relating to delisting and not being able to access capital are a bunch of scare tactics. Does anybody really think that DCTH is unknown? Obviously not. Take a look at the NASDAQ site. There is a list of institutional investors that already hold positions in DCTH. Besides, I am pretty certain that Delcath has probably already been in talks w/ NASDAQ about another extension. IMHO, there is not enough time to solicit a proxy (they haven't even filed the final one yet), hold a meeting, tally the votes, decide on the R/S ratio (assuming its approved), and put it into effect before August 14th. So there has to be a backup plan.
Or what about in an Apple Watch - as a lower cost alternative to their gold one?
List of current institutional holders from NASDAQ website:
http://www.nasdaq.com/symbol/dcth/institutional-holdings
@Mintmoondog - Thanks for posting this well-thought-out analysis. I think your description of "asymmetric upside for a speculative investment" is spot-on, which is why I'm not selling my shares. I just bought this a couple of weeks ago at 0.075, so I like the way things look right now. GLTA!
@Buckstopshere - I agree. Consolidation wedge seems to be forming at 0.20 support level. Daily chart looks very similar to the wedge that occurred after the run-up to 0.08. We all know what happened next.... Now, granted, the big leg up from 0.08 to 0.20+ occurred as a result of the R/S being voted down on 6/16, so I think we're going to need another catalyst to drive this up further. TWT...
@Mintmoondog. Thanks for the post! You make some really good points. Based on the fact that there seems to be some strong support at around the 0.20 level, there may be some accumulation going on as you suggested. One of the things I do find surprising in light of the recently very low share prices - and I mentioned it in an earlier post - is that outside some stock grants earlier this year, there has been no insider buying since 2015.
Right On! A R/S is the "lazy" way to bump the SP up (in order to stay listed, etc). Most of the times when it occurs, it's because its been necessitated by underlying problems, and invariably results in continued overall dilution of shareholder value after the split occurs (even though the split itself was value-neutral). Li obviously knows this, so I'd be surprised to see him try a "quick-fix" like that.
Yeah - Not pretty. They've done two 1:16 R/S's since that time. As I said, this one's a purely speculative play for me. Who knows? - If I get a 10-bagger out of it, I might have more $$ to drop into LQMT... TWT
Nope. Don't subscribe to any penny newsletters. Heard about LQMT from another investor. I'm an engineer in the aerospace business, so I was interested in the technology. After doing some DD, I decided to invest (not trade) in LQMT. As I said, LQMT is a longer-term speculative play for me. (IMHO, anything where you don't show earnings growth is at least somewhat speculative). Having said that, I see nothing wrong with speculating on a late-stage bio-pharm that may go BK (or may get bought out). With recent average daily vols in the hundreds of millions of shares, I don't think it's a typical PD. Given that I'm up ~200% in two weeks, it's not inconceivable this could end up being a pretty profitable trade. If so, great. If not, I haven't invested any more than I could afford to lose without blinking an eye.
@DMN - Agreed. And those are things I alluded to in posts 120895 and 120899. However, without contracts, LQMT is in a holding pattern. I believe that will change soon, so I'm staying long (have not sold any of my shares that I've purchased between 11/2016 and now).
Well, actually, I've been long LQMT since November 2016. I plan to continue holding because I believe in the technology and think there is a bright future for the company (however, it's still speculation). But that doesn't mean I can't or shouldn't try other speculative plays as well. Whether you agree or not, BOTH DCTH and LQMT are very speculative, and I'm sure at least a couple of others here would agree with that. It's not an all-or nothing thing. Just looking for opportunities where I can find them....
Uh..... Well, last time I looked, LQMT was still under $1.00 Hopefully, not for long, though!
@Andyd333 - That was me. Guilty as charged. I got in at 0.075 a couple of weeks ago. Been quite a ride so far. I agree - the volume on that sucker has been astronomical - That's one of the things that caught my eye. I think if LQMT has some significant news soon, we'll certainly see a big uptick in volume, although probably not at levels like DCTH is experiencing. In any case, I'm holding long in LQMT because I think some good things lie ahead. Cool technology, lots of potential applications, and a build-out of manufacturing capacity are all good signs, IMHO. Like I mentioned in a post a few days back, I think all LQMT needs (besides, obviously, contract(s)) is better marketing and business development efforts. I'm quite sure Li is working those issues, as he well knows that's where the revenue is going to come from.
@TekTerra - Following up on your earlier post about insider purchases. I searched openinsider.com again and I found them -- but they were not purchases; they were grants - big difference. The reason I didn't find them before is because I was only searching for purchases and sales. Details below:
2017-02-10 16:21:29
Simpson Jennifer K. Pres, CEO A - Grant $0.00 +31,250
2017-02-10 16:19:55
Purpura John EVP, Regulatory Affairs A - Grant $0.00 +30,000
2017-02-10 16:17:59
Keck Barbra SVP, Finance A - Grant $0.00 +20,000
Notice the share price of 0.00
Didn't see them when I searched www.openinsider.com . The only ones that showed up are these:
2015-07-28 17:05:25
Stoll Roger G Phd Dir P - Purchase $0.54 +20,000
2015-07-28 15:50:31
DCTH Taglietti Marco Dir P - Purchase $0.53 +200,000
2015-07-24 16:56:58
DCTH Philips Laura A Dir P - Purchase $0.50 +162,653
2015-07-22 17:54:37
DCTH Rueckert William Dodge Dir P - Purchase $0.48 +20,000
Where did you find the others? openinsider pulls directly from the SEC site, so I have no idea why they wouldn't show it. Can you post the specifics?
Only insider transactions I know of were all purchases back in 2015 at prices around 0.50. I do find it curious, though, that with the SP so low right now, that there have not been any insider purchases at all. Look at www.openinsider.com and search for DCTH.
RS Inevitable? Not if the shareholders vote it down like they just did recently.
If you're looking for volume and a wild ride, take a look at the DCTH board...
Does it suck much to be on the short side of this?
I can see your point, as well as Watts's point. From what I've read on this board and from my own DD, it seems to me that even though LQMT has been around as a company for quite a while, they strike me as being a company that has a great deal of IP (literally hundreds of patents), some smart people with great ideas and cool technology. In other words, kind of a "researchy" (for lack of a better term) type of company. Lots of technology and "blue-sky" ideas, but not much in terms of actual product execution and manufacturing. Companies like that tend to be more speculative opportunities (to DMN's and other's points), so there are a number of us here who see the POTENTIAL value in that. Granted, that's a pretty tough sell for those of you who have been riding this train for a while (like WATTS, for example). So realistically, SP can only continue to rise on speculation as long as there is enough news to "fuel the fire". Sooner or later, that tapers off if investors/traders grow impatient.
Now, enter Prof. Li. This event, more than anything else I've read here, seems to suggest that the company is being prepared to move from being just a "brain-trust" to a company that will actually be executing on production contracts. Obviously, Li understands that you have to bring in revenue to be able to support further increases in the SP, and with his stated desire to be listed on NASDAQ, there has to be some catalyst to start that. As I am writing this, it occurred to me that might it be possible that Li has plans to use the LQMT site as a short-run production facility or a place to prove new LQMT applications as the R&D folks develop new stuff? Perhaps they do initial low-rate production there, fine tune the processes, and then move High volume production to the Eontec site?
(Just speculation on my part. I have no formal basis with which to make that assertion)
Please explain why you think FDA approval was dependent on whether or not DCTH did a reverse split. IMHO the two events are completely unrelated.
That is correct. However, the R/S ratio is constrained to the range of 50:1 to 500:1 as stated in the proxy statement filed w/ the SEC. I realize that's a wide range, but at least it's not unlimited.
Exactly!! Unless and until we see a PR and an SEC filing that the R/S was approved, there is no R/S. IF it was approved AND they choose to go ahead with it, they are required to announce the details of the split along with the effective date.
If the shareholders approve the R/S, the BOD will set the ratio based on a number of different factors all outlined in the proxy statement filed with the SEC. The text below is from that filing:
"Should we receive the required stockholder approval for the Proposal, the Board of Directors will have the sole authority to elect, without the need for any further action on the part of our stockholders:
(1) whether or not to effect a reverse stock split, and
(2) if so, the number of whole shares, from 50 to 500, in the discretion of the Board of Directors, which will be combined into one share of our common stock.
Notwithstanding approval of the reverse stock split by the stockholders, the Board of Directors may, in its sole discretion, abandon the proposed amendment and determine prior to the effectiveness of any filing with the Secretary of State of the State of Delaware not to effect the reverse stock split on or prior to [?], as permitted under Section 242(c) of the Delaware General Corporation Law.
If the Board of Directors does not implement a reverse stock split on or prior to [?] stockholder approval again would be required prior to implementing any reverse stock split"
Sooooooo.... I wonder if that tie clip is made out of LiquidMetal?
Fair enough. But in either case - testing support at 0.25 or 0.23 - there still has to be some catalyst that causes that to happen. Something has to happen to "shake the loose hands". I think right now, we'e in a holding pattern waiting for news to move it (in either direction). The type and magnitude of that news will determine both the direction and the ferocity with which the SP tests either those support levels or the overhead resistance at 0.30+. We shall see... GLTA!!
Well, it's got to break some pretty good support at 0.25 to 0.26 for you to get a chance to buy in at 0.20 to 0.22. That would probably require some sort of "bad" news like delay in plans, unforeseen problems with the technology, etc that could cause longer-term investors with profitable positions to head for the exits, resulting in a selloff. As I've pointed out in a previous post, the chart is in a classic consolidation wedge right now, and I think barring any of the aforementioned problems, the next leg should be upwards... GL.