POSC: Damned if you do and damned if you don't
Written by Peter DePalma
Friday, 14 May 2010 05:47
After alerting members to Positron Corporation (OTC:POSC), the stock roared from $.06 to a fifty-two week high of $.30. Shortly after that, we advised our readers and subscribers that they should consider selling their positions in POSC before the scheduled press conference, fearing that the event could become a "buy on rumor sell on news" event.
We've come back from vacation to an email box full of both love and hate mail, thus the title of today's article.
Apparently, our advice to "sell" prior to the press event did not go over well with many of the longs who felt that we were sending mixed messages about the stock, but after carefully considering what many day traders do with these "forward looking" types of stock plays, my editors felt strongly that we should advise our readers despite the potential for back lash.
As it turned out, things got even uglier than any of us expected when the company decided not to announce their highly anticipated partnership details to an audience of reporters in attendance at New York's Nasdaq Marketsite. Most of the reporters covering the event didn't even blink, but the tens of thousands of investors who were following the conference via webcast immediately responded by dumping their shares. What resulted was a wave of attacks and false accusations about BMR promoting and/or pumping and dumping the stock. Those who followed the advice and erred on the side of caution won while those who decided to gamble more speculatively paid a price.
At the end of the day, the facts still remain: POSC is a solid company that has been around for over 27 years. The CEO may need more media relations training given his very rough delivery at the podium, but reporters at the event (none of whom even asked about the partnership details that investors were craving) seemed to take the most interest in management's announcement that POSC anticipates generating over $200 million in revenue within 18 months and over a billion in revenue within 4 to 5 years. This is a stock that many of us have jumped back in on and is still available for mere pennies per share.
Even though they fully intended to when the news conference was scheduled, POSC could not announce the name of the key partnership they wanted to reveal at the press conference for a number of reasons. As we understand it, there are at least one contractual and several strategic partnerships in the works or even already in place. As many disappointed and angry investors called and cried for full disclosure under threats of lawsuits, the company followed up with a cryptic press release about the matter in the days following the conference. Although no one at the company can go on record publicly for the same reasons we mentioned, we have confirmed to the best of our abilities and based on candid interviews with multiple sources, that Positron has partnered with Covidien (NYSE:COV). In addition, our sources tell us that they are also in the process of aligning with other big board companies for some very important strategic partnerships on the pharmaceutical side of the business. Furthermore, it's worth considering that any one of these strategic partners may choose to take a position in or even outright buy the company; especially once the new network of automated imaging drug dispensing machines is set up.
BMR was told that at one point, one of Positron's newest allies had apparently gone so far as to "threaten them" before deciding that joining forces might be a better way to respond to their innovative nuclear medicine's dispensing and distribution technology. The bonding experience with that company is still shaky, but much more friendly now according to those familiar with the situation and it definitely played into why the company decided against the public revelations.
If one looks at POSC and it's FDA approved PET Scan imaging technologies, the back orders for systems, and the shift not only in the marketplace, but also the reimbursement as well as medical and technical needs of the cardio and oncology imaging space, it's clear to see that the company is not only undervalued, but vastly undervalued. Look up IMGG and you'll find a company that traded at close to $2 per share this year based on only "half the promise" that POSC offers today. That company has submitted for FDA approvals several times and still have no clearance, yet they still trade today at nearly fifty cents per share.
Is the company trading higher than it was when we first covered it? Absolutely, and it is difficult to argue that the share price will not continue to rise as future revenues, orders and developments are announced. Do we continue to see it as a multi-bagger? Of course we do. Especially given the fact that the entire space they deal in is changing and that they are positioned without a single competitor as the leading company within that space.
Disclosure: Long POSC
BiomedReports is not paid or compensated to report news and developments about publicly traded companies. Full disclosure can be read at the bottom of / About Us / Section
