In October, short interest increased from 65,000 shares to 448,000 shares. it will be interesting to see the short interest for the period 11/1 to 11/15.
Today, the stock filled a gap up that occured on 9/25 when the stock opened at $9.98 up from the previous day close of $9.38.
Just over a week ago the company had a very strong quarterly conference call in which they indicated that their spy equipment is now located in over 600 hospitals, that all of their partnership arrangments are progressing smoothly, and that Pinpoint is progressing well. There was nothing in the earnings or CC presentation that would justify this sharp reduction in the pps. The only possible negative is that since Obama was reelected, Obamacare is here to stay, and with that comes the additional tax on the sale of medical devices.
Obamacare imposes a 2.5% tax on REVENUES for medical equipment sold in the US, not earnings but revenues. For a young start up medical equipment company this is particularly onerous since it is almost always a struggle to have positive cash flow when companies are investing in R&D , marketing channels and production facilities without positive earnings. This is why ISRG and Chindex (sells exclusively into China) are up today and NVDQ is down and has been since Obamacare was assured on Nov 6. It appears at least one large shareholder (institution) is unloading its holdings. NVDQ has a strong balance sheet and is on the cusp of going positive earnings (though this may be postponed a few quarters because of the new tax). Once the institution has sold its position the stock should stabilize and with positve earnings within a year, the upward price momentum should built again.
Thanks to endo for the post. I agree that there does not seem to be any underlying reason for such a move. Also agree with andersongordon that this is probably driven by one large shareholder deciding unloading a significant chunk of shares. NVDQ is after all fairly illiquid on a day to day basis. Prior to it's listing on NASDAQ moves like this were a fairly routine occurrence.
Am I correct that the R&D tax credit for 2012 has not yet been renewed? Congress plays chicken with this every year but has renewed it in the end each year.
Is there not an offsetting R&D tax credit aspect in Obamacare? As in making the R&D tax credit permanent, or at least as permanent as the medical device tax?