Titan Medical Inc (TMDIF)

[drmacd]

This is a fluff article that contradicts itself. Look at the low institutional holdings and note that more of them left than joined recently.

I do like this company and will buy unless it runs away from me. However, they will need to raise cash and using debt at this stage is premature and too risky despite the appeal.

If a capital raise of 50M is made then I will take the plunge. I prefer a placement at $2.50/sh with no warrants. Perhaps a quick sale for $300M is the best option for the longs here to recoup some losses.

Debtors will want bond covenants or debt terms which puts shareholders and management at too much risk if sales are delayed for any reason. There could be hiccups in the delivery or implementation stages and cash will be needed to avoid being consumed by vultures.

Sales will be slow in the first 2 years while markets gain acceptance and costs will be high due to the sales and support teams. Intuitive went sideways for 5 years before boom time so institutions can wait until they get a sense of market acceptance. A buyer like J&J can enter earlier once the device has been approved by FDA.

Looking 5 or 8 years down the road this will be an outstanding investment and a 10 or 20 bagger perhaps, even with the dilution proposed. However, it is too early for the bigger institutions.

Other small caps can have very high institutional holding despite a sub $5 share price, but these will be smaller niche institutional buyers who I fondly term vultures at the moment. If you see Wainwright or similar coming then walk away.

The recent run up is mostly retail speculation and to some extent you guys. I had my finger on the trigger at $1.05/sh but was waiting for the financing so my bad for missing the current rise. I do believe thought that my patience may be rewarded relative to buying right now.

The bridemaid (for now) ...

Cheers!