Israel-Medical-Healthcare

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Why did Lifewave stock rise 900% in 4 months?
18.4.07 | 11:22 By Tal Levy
Lifewave (TASE: LIFE) shares have skyrocketed by 900% in four months, and the Israel Securities Authority wants to know why. The company itself shrugs that whatever it had to tell investors, it did.

The medical-technology company's field of expertise is bed-sores, diabetic sores and the like, which it chooses to treat using electrical stimuli. It listed for trade four months ago, raising NIS 7 million with absolutely no help from underwriters.

On Tuesday shares in Lifewave leaped 25% on tremendous turnover of NIS 63 million. Its market cap has soared to more than a billion shekels, while its shareholders' equity is all of NIS 8 million.

Lifewave made no revenues whatsoever in any of the years from 2004 to 2006, throughout which time it accrued a loss of NIS 15.6 million.

This morning Lifewave published its response to the Israel Securities Authority, in which it merely pointed to its past announcements to investors.

Among other things, the company noted that at the start of March, it announced an exclusive distribution contract in Germany worth 19.5 million euros over four years.

It also signed a 9 million euro contract with a Belgian distributor and advised investors accordingly, Lifewave pointed out.

Lifewave also noted that it had advised investors of a distribution agreement in Italy, worth a cool 18.25 million euros over four years.

Altogether, the company said, it has agreements in place guaranteeing 47 million euros in income over four to five years.

Lifewave also notes its prospectus from the end of November, in which it discussed its potential market cap. The prospectus postulated that the world market for its wares consists of 19 million chronic sufferers of sores, of which 10 million are in the west.

The cost in the west of treating a chronic bed-sore, or similar malady, not requiring hospitalization at any point, ranges from $4,000 to $40,000, Lifewave said.

When hospitalization becomes involved, the cost in the west of treating such sores rises to about $90,000.

In short, it hypothesizes that it's addressing a $1.5 billion a year market, which is growing by 7% to 10% a year.

In short, Lifewave had absolutely no new information to divulge today, that might explain the incredible increase in its share price.

http://www.haaretz.com/hasen/spages/850086.html