Aug 27, 2010 10:04 AM PDT
Let's look at the reasons for all the buzz.
SpongeTech Delivery Systems, Inc. (SPNG.OB)We've talked about this one close to 8 million times over the last couple years, most of the mentioned coming in the last two months. (OK, 8 million is a slight exaggeration.) So, I'm not going to dive into it here. Just do a site search for SPNG, and you'll find everything.
More relevant to the last couple of days, the buyers have been stepping in on the dips - even the really big dips. The trip from 28 cents to a low of 1 cent (though I think that's an errant tick) may have literally reloaded the chart for a whole new round of buying-then-selling.
I've argued this stock is worth about 20 cents based on historical results of $50 million per year in revenue, and $10 million in earnings. You'll have to extrapolate that to make a future-based valuation though.
In any case, it's still one of the most-purchased stocks we've seen over the last 24 hours.
American Scientific Resources, Inc. (ASFX.PK) Wow! Up 70% today, and up more than 6000% over the last four days? Hey, anything is possible when your shares are priced at $0.0002. They're now at a whopping $0.0125.
In short, American Scientific is a medical supply company. The stock went nuts last week following a positive announcement that swine flu hysteria was driving sales through the roof. The company was touting the $30,000 in online sales they'd achieved last month.
I was initially prepared to take a poke at a company that was proud of only $30K in sales, but then I started to dog a little. It didn't indicate how much was being done offline. And, we don't know how much the company does in a normal month.
However, we do know that even after the recent run up in the stock, the market cap is still under $3 million. If the $30K/month online ales can be sustained, that's $360 million per year right there....not counting other revenue vehicles.
It's a pink sheet stock, so be careful. It's not a crazy idea though... could be worth a little DD to see if it's legit. (Just keep in mind the pumpers and bashers still have control.)
Nephros Inc. (NEPH.OB)There was some strong buying pressure after yesterday's dip, pushing shares back up towards the upper end of their range. Today though, we're already seeing the buying pressure fade. That can happen sometimes when your stock gains 1600% in less than a month.... the potential profit-takers don't take chances.
What prompted all the activity yesterday? That's just it - there was no news. If anything, it was something of a blowoff top. We suspect the trading activity was actually net selling yesterday even though our internal indications say it was buying. (That can happen when you see a bar that tall on volume that deep.)
But what cause the initial run up? It was speculation that the FDA was on the verge of approving a new dialysis filter. There's also supposed to be a water filter on the way, though I don't think that requires any approval... it's a non-medical device. It's also not going to be a big deal when it launches; the medical equipment is where the money is.
Either way, owning NEPH is the same as tossing a coin - it's all riding on the FDA's decision.
Personally, I don't see how there's much gas left in the tank. Buy the rumor, sell the news?
Cell Therapeutics, Inc. (CTIC)This company is starting to be like the "By Mennen" two-word jingle.... it's catchy at first, then annoying because you can't seem to escape it, and then you just get so used to it being around that you don't care anymore. (10 points awarded to anybody who knows what I mean when I say "Caaa-STAN-za".)
What's the relationship? Cell Therapeutics is somehow still being throttled on pending news from the FDA.
Pixantrone - the company's Phase III cancer treatment - has yet to be approved or unapproved by the FDA. It's not a foregone conclusion either; the drug is known to cause heart problems for some of its users. In the meantime, the company is working hard to convince debt holders to convert their notes to cash and stock. The most recent offer is worth about 87 cents on the dollar.
The decision deadline is today, at 5 pm EST.
As if the dilution threat weren't bad enough, the company is still running short on cash and is likely to raise funds again in the near future... by selling/issuing even more shares. That may be tough to muster even if Pixantrone is approved (though it would be much easier to do if the FDA gave 'em the green light in the drug).
My take? I have no idea why there's still so much buying interest for the stock. The chart looks overbought, and all the gaps we've seen over the last three days suggest to me that traders are starting to get a little anxious.
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