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Fibrocell Science, Inc. Message Board

  • financialguru20021 financialguru20021 Oct 13, 2012 1:09 AM Flag

    Why you shouldn't sell FCSC just yet

    I thought I would provide some clarification since a lot of investors are incorrectly interpreting the news. The recent private placement deal is a huge positive for FCSC investors because of the following reasons:

    Private Placement - NRM VII Holdings I, LLC, a Third Security, LLC affiliated fund and other investors purchased 450 million shares at 10 cents per share worth a total investment of $45 million. When you take into account that FCSC currently has about 100 million shares outstanding, the new investors are valuing the company at $55 million. This means that the pre-deal market cap of $15 million is way undervalued.

    Debt - Concurrent with the deal the company will be converting part of it's debt into equity with the rest being paid off from proceeds of the private placement. FCSC will thereby be debt free upon completion of the deal. This is huge for FCSC investors since this removes the risk of bankruptcy in the near term. Debt is the biggest risk to growth companies in the early stages due to the lack of cash flow.

    Up-Listing - FCSC recently got approval to effect a reverse stock split of the outstanding shares of the Company's common stock, prior to July 31, 2013, if the Board believes such action will facilitate the listing of the Company's common stock on a national securities exchange. I'm not a fan of reverse stock splits but I'm a huge fan of up-listing to a national exchange. This should be in new investors that will increase market cap.

    Partnership - We will be receiving more information regarding the partnership shortly but I expect FCSC to benefit by getting access to new IP that should improve manufacturing production as well as further the development in clinical trials.

    Institutions are accumulating a position which is evidenced by the sudden and large increase in volume over the last few days. You have to think like a institution here and accumulate along with the big investors. I will hold on to my current position but will look to add to it once we get confirmation of the up-listing, afterall the company was nice enough to give us a target date which is before July 31, 2013.

    Sentiment: Strong Buy

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    • Indeed all your points are valid, however; what is the game plan going forward?
      What is the "road map for the future"? Where are they going to make their money?
      As you know revenues and earnings drive stock prices. Why should we believe that the stumbling and bumbling with the marketing of Laviv is going to stop immediately and reverse course over-night into credible product that has a "place among the stars" when it hasn't shown much in 18 months post FDA-approval.

      You sound like a decent fellow, but; after all: "one thousand artificial flowers will not make a desert bloom, likewise; one thousand empty faces will not fill an empty room."
      Why should we believe you are not another from a long line "silver tongue pumpers" -- like the former "guru Mukinaki" sent to "drive cattle to the slaughter-house".
      Since FDA approval of Laviv, management has received millions upon millions of financing dollars, with nary a wrinkle to show for it. What makes the recent hubbub any different from the previous financing.

      So, after all of your cool blah, blah, blah, blah... as honestly as you can: please tell us just one simple thing. What has changed in management's strategic and tactical direction, as they struggle to tackle issues of: weaknesses, opportunities, threats and strengths? We seek "edifying eloquence" rather than pomp, please.

    • All valid points. The one thing missing is a change in management. Until that occurs I would avoid taking a position.

      • 1 Reply to trbca
      • I agree with your concern but the deal does bring some talent to the board which I expect to help guide the company going forward. RJ Kirk has a strong track record of making money with partners in the biotech industry. He finds investments where he could bring value by integrating IP as well as provide strategic guidance. His company has such a large investment that he has a vested interest in making sure that the company succeeds. Remember his company received common stock for his investment and all preferred stock has been converted to common so at this point everyone is on the same boat. I don't mind being on the same boat with the billionaire investor with tons of experience in the industry where he made his billions.

        Sentiment: Strong Buy

    • Thank you for your insight

      Sentiment: Strong Buy

 
FCSC
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