Why is Biolase down 70% from its high in just 3 months?
It is not what the sunshine girls will tell you. IMHO, there is NO dark and hidden conspiracy, just standard fundamental analysis.
There was a good reason the "bulls" were running in the beginning of this year. freddie cobbled together one of the best quarters Biolase has ever seen in 4Q12, but it was an illusion. He closed the books early on 3Q12 pushing revenue into 4Q and then delayed incurring cost into 1Q13. This made revenue and PROFIT appear to grow QOQ and YOY causing true believers who weren't familiar with freddie and his ways to buy. This buying attracted attention & technical MoMo boys came in.
4Q12 was announced with the stock around $4 on March 6th. The stock hit its 12 month high of $6.05 on April 29th and then fell back.True believers bid the stock up to $5.55 intraday before the loses report on May 7th. Once investors saw the real numbers the PPS dropped. Two weeks later it saw +$5 for the last time this year. The stock dropped below the 30 dma and stayed there for 2 months till a week before 2Q13 loses report when true believer enthusiasm again pushed the stock price up to a high of $3.75 a week before the 2Q report
When the report acknowledged another QOQ drop in revenue, another earnings loss, the fact Biolase was in default on its line of credit and that a ANOTHER large secondary was planned, the share price plummeted. dropping 50% in a week.
Biolase is not a game. the PPS doesn't rise for 100 days and then fall for 100 days. Biolase's price movements make complete sense based on the FUNDAMENTALS. Making bold predictions about rising prices is fool hardly at best given Biolase's history of disappointment.
There are three near term drivers; the Comerica credit line extension, the coming secondary offering and the 3Q13 loses report. All three of them will have to be resolved favorably for the stock price to rise. A disappointment in any one of them will cause another sharp drop in the price. One has to ask, "Is it worth the risk?"
Perhaps its because, ""Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence." John Adams, December, 1770.