Industry source tells me there is a possible DOJ investigation in MiMedx sales practices. Says most of these sales reps were fired from Dermagraft and up to old tricks again at MiMedx. Google "Dermagraft + DOJ" and you will see what he is talking about. I'm just the messenger, but I just sold my shares at 6.65. I just think if Mimedx hired these fired Dermagraft reps then shareholders here are playing with fire.
The DermaGraft DOJ investigation initiated almost 2 years ago - Aug 2011. No action was ever taken. I'm curious if your industry source is employed by Shire/Dermagraft or heard the rumor from someone there... With Epifix sales skyrocketing at the expense of imploding DermaGraft sales I can see where frustration and desperation would lead one to point fingers at the upstart competitor with the clearly superior product.
Couple things. 1. My source does not work for Shire. He is a senior executive in the wound care market and very reliable. 2. The Shire CEO recently made it clear the DOJ case was not at all over. In fact they've already taken a few hundred million dollar reserve charge for it. 3. I did a very extensive search on Linkedin and it is clear most of the sales people from MiMedx are from Dermagraft (Advanced Bio) so my source is right on that. Start with Michael Fox the Sales Director and you'll see. Also, almost all of them started at MiMedx all at the same same about a year ago. The Shire CEO also pointed out in an easily found article that they fired a lot of the Dermagraft sales reps because of their practices brought to light by the DOJ investigation. 4. This part is just speculation on my part- maybe the MiMedx reps are being questioned by DOJ based on just their previous Advanced Bio employment. 5. I've seen the data and I don't know how anyone can sell Dermagraft as it is barely effective. 6. My source only made me aware of this info very recently and so made be nervous about the risk in MDXG shares and why I sold yesterday. Based on the quick drop yesterday I posted my info and put it as a possibility for the drop as it seemed some news was leaking out. 7. Another possibility based on their relatively light cash position is maybe they are thinking about doing a secondary offering. At these valuations that might be a good idea.
You say "Industry source" which is vague.
Then you add "possible DOJ investigation" which implies it ain't a reality but you'll try to use that angle to perhaps dissuade long positions?
Then you write "Says most of these sales reps were fired from Dermagraft..." only to subsequently offer that "I just think if Mimedx hired these fired reps..." Does that mean your Industry source has misinformed you in the past and you're unsure of his/her credibility?
With such an array of doubt, why did you post that message?
My take on it - one of the company Directors just quit and probably was selling his stock options. No reason to panic. The company has a class A product with no company debt and increasing revenue. That has to be a good thing. I'm expecting nothing but upside - no matter how much it initially drops
Or could it be something as insidious as "profit taking" after the stock went parabolic from $1.80 to over $7.50 in a year? Why does some moron always offer a lame "conspiracy theory" type reason when a stock has a healthy correction?And I'm sure the DOJ just follows the same people around for years and years doing nothing but "investigating", allowing them to go to other companies to do the same things.
Profit taking after the huge yearly run sounds more plausible. Plus, there were some weak longs who bought because of inclusion in some new index end of quarter. I can't tell you how many times I have seen buying in various stocks based on that particular scenario that never panned out in the short run.