Estrella's Sizzling Hot Stock Plays

[mick]

Ah Reading My Friend. $OPGN Stock-Perfect-Storm.worth $10 to $15

https://seekingalpha.com/instablog/50093457-best-on-the-street/5422187-opgen-plague-stock-perfect-storm

Summary
OPGN filed updated financing documents with the SEC which report the exercise of an additional batch of 2.31MM warrants @ $2 bringing in $4.6MM cash.

The warrants were attached to an October 2019 unit offering. The exercise brings the remaining overhang down to just under 800K.

OPGN amended its ATM prospectus to an additional 3,728,802 shares @ $4.04. We do not believe the Company is selling stock at current levels, though it is a potential overhang.

The warrant exercise/dilution was accounted for in our initial recommendation on the stock and, if anything, makes our conviction on the name stronger to to cash infusion and warrant reduction.

While we are checking with our legal resources,
we believe since
the warrant exercise tacks back to October 2019 it will allow for
an additional 2.31MM votes in favor of the upcoming
03-30-2020 Curetis N.V. merger vote.

Since Curetis has already approved the merger, sealing the OPGN side
of the deal is paramount to this stock working.

We have updated our cap table for the information and assume the new
ATM will price at $2.75 well below the $4.04 filing price in order to
be conservative.

The Curetis merger will rerate OPGN into a leading provider of
COVID-19 test kits in Europe and abroad and unlock value for the Newco.

We maintain our STRONG BUY recommendation.

Our price target based on COVID-19 test kit pure-plays,
plus SWAG value for non-COVID-19 OPGN/Curetis offerings,
remains $25 subject to potential adjustment based on ATM #2 use
(see Author Note below).

OPGN/Curetis Pro Forma Cap Table @ $2.75 Including Warrant Exercise & ATM Offering #2

OPGN_cap_table_ATM_and_warrants_03-18-2020.pdf

SEC Filings For 2.31MM Warrants Exercise & ATM Offering #2

https://www.sec.gov/Archives/edgar/data/1293818/000107997320000187/opgen_425-031720.htm

https://www.sec.gov/Archives/edgar/data/1293818/000107997320000189/opgen_424b5-031820.htm

Author Note

No matter how you slice and dice the valuation, using the CODX comp for COVID-19 test kits alone, OPGN should be trading in the double digits. It's not realistic to continually change the valuation in this environment with CODX moving between +/- $10-$15. The ATM #2 usage could dilute our valuation target by 10%-20% if it is used, but with that said, it would provide $10MM or more in fresh cash to support the "new" OPGN when it closes the Curetis N.V. merger at the end of this month. A stronger balance sheet providing management the ability to execute on its plan would more than offset potential ATM #2 dilution, in our view.

Disclosure: I am/we are long OPGN.

Additional disclosure: We intend to provide additional commentary in our ongoing coverage of OPGN.