Anavex Life Sciences Corp (AVXL)

[Gator328]

The mini-crash in December 2018 wasn't tax-selling. It was the market's reaction to a government shut down, which isn't a fluke at all given the current political climate. I don't think it's out of the realm of possibility that another shutdown occurs when the next budget needs to be approved.

Macroeconomics aside, $1.25 is possible because with a company like Anavex there isn't a valuation floor. If A273 fails, it's almost a certainty that the price of AVXL's stock drops well below the $1.25 threshold.

Compare this to more established, revenue-producing companies -- they tend to have quick ratios much greater than 1, so even a worst-case disaster scenario like planes falling from the sky will not result in a massive price crash. It's all about liquidation value.

On the other hand, AVXL has considerable upside. Way more than a revenue producing company that can be modeled easily for 5-10 year growth.