We have had a very healthy and severe correction which has eliminated all risk from VBLOC. If we were trading at $ 5 now then I would say there is down side however at $ 1.05 there is only upside left.
In the last 5 years the months of late November to early January have been EXPLOSIVE for ETRM rallying from 100% to 300%. This year should be the same as old habits die hard. I predict rally will be even more robust in the 400% to 500% range from these levels upon the words approval.
The beauty of this stock is that just as it is illiquid and goes down quickly, it remains illiquid and goes up very quickly especially with some 9 million shorts whose greed knows no end.
Some interesting stats: Over 200 million obese Americans or 70% of the population of which 30% or some 70 million are truly obese and need urgent alternative or they die from so many complications due to health risks.
Even if we assume 1 million operations per year with VBLOC it will take 70 years to get USA slim again.
Given the flop in pills as I enjoy seeing sell off in OREX, ARNA and VVUS, all with approved pills and all with dismal sales, the market is now set up for a huge surprise for VBLOC which will have a monopoly out there much like Apple did or Tesla is doing.
What type of earnings are they projecting in the future, simply insane numbers since the whole market 100% of it belongs to VBLOC.
What is the KEY selling point:
a) SAFETY, SAFETY, SAFETY
b) 25% EWL at 3 years
c) Does not alter lifestyle, does not remove organs and is reversible (so truly flexible to suit your needs)
The fact that institutions are hurting and must sell due to redemptions has created a temporary situation where ETRM is on sale like cheap banana's at 12 cents per pound instead of regular 79 cents per pound. Banana's are great quality so better load up cause others will do it before you the longer you hesitate.
We will get a decent bounce back to the $ 1.30 to $ 1.50 range by end of November 2014 and then hopefully we get that stamp saying APPROVAL. Once approved, we should open in the $ 4 to $ 5 range as celebration is done.
Be patient, the worst should be over.
You took the words out of my mouth. It is exactly what I was thinking this morning as I see him pushing Apple to buyback stock. We need ONE major aggressive player and you will see significant value in this stock. Right now everyone is too complacent. That will change upon approval.
Then again I saw same behaviour on DNDN where the corporate language showed that the phase III results were good yet it traded at $ 3 only to trade at $ 22 when results were announced.
How can one explain this? I guess people follow the herd mentality of buying when it is safe. I tend to buy when it is very risky as payoff is 10 to 20 times higher. Losses too but hey that is part of the game.
The sell off should be over in stocks and in biotech in particular. Tonight Alcoa came in with solid earnings so that will calm the market; also Fed bickering over rates means they will not be raised in 2015.
I am now more bullish on ETRM than previously. Why? Because all weak hands have been decimated and hopefully what is left are real investors whom believe in VBLOC. The outlook for VBLOC has improved dramatically since OREX has turned out to be a flop and that includes VVUS and ARNA. Diet pills are unable to overcome the SAFETY factor with doctors and patients. No doctor is going to put his medical practice on the line to prescribe diet pills with severe side effects to obese people whom have a host of other medical issues. To take a diet pill means you are in great shape with no medical issues.
Article upon article shows there is an obesity crisis in USA costing $ 200 billion per year in health care with 70% obese and 1/3 truly obese. This problem has not gone away and will only become more severe since there is no SAFE effective treatment out there.
Where does that leave us. Well, we have an edge due to SAFETY, device being new the 1st in 10 years and, much cheaper than bariatric surgery. Safety also is a significant edge over pills. Why do you think pill companies have been attacking ETRM? They see the writing on the wall. It will be the end of diet pills.
I predict government will be very quick to provide insurance coverage to people to get product to the masses. Heck they save $ 200 billion a year if they get this problem under control.
The fact that it has taken long for FDA approval means we will SOAR once it is in since many investors are probably on the side lines due to volatility and will enter once they hear the words approval.
Target price of $ 100 intact along with robust sales for the next 20 years.
Those whom wished evil on ETRM from pill manufacturers are seeing their values thrashed and, they have approval so nothing is going to save them since there are literally NO SALES from pills.
The number 1 issue which doctors have to circumvent before offering alternative to obese people is: SAFETY.
Obese people have a host of medical issues related to obesity so they can`t take pills with dangerous side effects, notice OREX 47 pages (black label). That is enough to scare anyone. Doctors have pronunced themselves, obese people can`t take pills if they are NOT SAFE. They are not going to get sued.
The MAJOR advantage VBLOC has over competitors is its SAFETY record. We know it is effective with 25% EWL at 3 years but it is the SAFETY which will make it a blockbuster in sales.
The fact we have a weak market with selloffs should be used as a time to LOAD UP (average down) as stock is on special sale.
Once approval is in, we can easily hit $ 5 to start and then you would have wished you got it at $ 1.05.
My price targets have not changed since OBESITY is still a huge disease and there is really nothing out there for obese people. The fact that ETRM had a severe correction does not alter the future. I believe the plunge in pill stomachs in failing to get much attention from obese people especially since SAFETY is the number 1 criteria doctors look at, has actually added fire to VBLOC as an alternative.
Once it is approved and sales begin to ramp up, you will see an EXPLOSION in price.
We are truly under the radar, which is good for longs whom want to load up. Once we are on RADAR we are going to trade at the $ 100 price I spoke of.
Someone said, "you have to have stomach", yes indeed. ETRM has had a SEVERE correction from the $2.60 level, much more severe than others due to illiquid stock. Still one has to say that it is on a $ 1.50 move and can be made up in ONE DAY, if good news arrives.
The fact that pill stocks are plunging adding confirmation that this remedy is NOT GOING TO help reduce OBESITY, this has cleared the hurdle for VBLOC, both from an FDA standpoint and from DOCTORS.
Once doctors has said no to pills then there is no point bringing in different color of pills. The issue is always the same. Obese people have a HOST of MEDICAL issues and since pills have severe side effects, the obese aren't able to take the pills hence, no market to pill manufacturers.
The doctors NEED something that is VERY SAFE for their patients and bariatric surgery is not it. VBLOC will give doctors an OPTION to recommend patients an alternative. There is no competitor so VBLOC stands to profit from this MONOPOLY.
A firm like Medtronic can see this opportunity and are waiting for the APPROVAL stamp to finally launch a bid.
The irony of it, GTAT is in bankruptcy and investors still value it at $ 110 million. ETRM about to enter billion dollar obesity industry valued at $ 78 million.
All the March buyers are gone having sold a long time ago. Most of the people who bought are in the $ 1.10 to $ 1.15 range. A few March buyers have indeed averaged down so average price is $ 1.20. A spike of 130% as you predict will bring fortunes to a lot of people. Thanks for pointing out how much this stock can run.
Why do you put so much importance on whether you are under water or over water. Investing means that you take a longer time horizon than simply looking for 10% in 3 days. Does it really matter if a person bought it at $ 1 or $ 2 per share, if in 5 years to 10 years it is worth $ 100 or more.
Buffett invested $ 5 billion in GE at $ 20 on to watch it plunge to $ 7. He hanged on, now he is at $24 plus has been collecting 20% interest per year. Buffett invested in Goldman Sachs $ 5 billion at $125 and watched it plunge to $ 50 before rallying to $ 150. He also collects another 20% interest here.
Buffett doesn't time the market. He sees an opportunity and he loads up. Then he gives himself TIME, with lots of patient even though he is in his 80's.
If investors do their dd and feel comfortable with risk that ETRM will get VBLOC approved, that they will fill a huge gap and it will be a growing business going forward, what is wrong with loading up here? Is it not better to do it here costing a fraction of what it would cost with less risk and a very high price?
I see NO RISK in this stock, at all. I see approval. I see VBLOC robust sales for many years filling an unmet need. People who have had bariatric surgery recount their horror stories to others. It is unbelievable the amount of risk people take because they have no other alternative. That will change with VLBOC.
I have often wondered why shorts would keep wasting money throwing the stock back and forth to themselves in increments of .002 which makes no sense. A .002 difference between buyer and seller on a 100,000 share order is $ 200. I doubt someone really cares about saving $ 200.
The question becomes, why are shorts not covering at this price, if they have shorted say at $ 1.80. I think I have uncovered some of the reasons.
There are 8 million shorts whom can`t cover since there is really 0 sales. Sales are from one short to another short. End result is still 8 million shorts. So they play this game of going back and forth with same shares hoping to frustrate longs into selling, which they are not. So they are stuck here. There only hope is that in doing this price drops a little that even if it soars they can cover with limited damage and if it plunges on negative news then they can easily cover as longs sell. The most frustrating part for them is that even though they have managed to get price lower, they are still short 8 million shares.
When FDA news will show approval you will have 8 million shorts running for cover + 20 million new buyers wanting shares, with NO SELLERS as those remaining have had enough and if they did not get scared now, they will never be scared.
This sets ETRM up for a Vanda type reaction from $ 1 to $ 14.
It is interesting that you noted that. It is true that there is 0 outside interest since company is under the radar and with no approval yet, there is really no reason to celebrate. To trade at .002 intervals would mean lots of buyers and sellers interested at that level. Given there is NONE I do understand your point.
For the shorts this is costing them money to move back and forth the same shares without getting much result. I know commission fees are little but at some point they will get fed up.
What I do see is NO SELLERS, buyers are shorts, sellers are shorts, probably the same couple of firms. How will they ever cover 8 million shares short if they can't even get longs to sell.
Until FDA news this will swing where it wants to be as it has no foundation since it remains purely a biotech spec play at this moment.
I do however believe that you would be foolish to think that valuations can go much lower when ETRM carries a $ 79 market cap with pending approval. In bullish markets ETRM should be carrying $ 400 to $ 500 million valuation pending approval then soar to $ 1 billion valuation. We are at 1/10th of this valuation so instead of thinking 10% why not load up and think 100%.
I read the 8K filing news. What I find of interest is:
a) Mention of VBLOC commercialization for March 2015 in Austrialia
b) Consulting fee only paid if reimbursement in Austrialia is approved.
Although insignificant in terms of fees paid $ 12,000 per month, nonetheless the body language of ETRM in 2015 is COMMERCIALIZATION, which means REVENUES begin to flow into the coffers. ETRM was truly waiting for FDA approval prior to launch. I guess it makes them a better buyout candidate and also coordinates the launch around the world.
Soon we get FDA approval and then ETRM will carry new valuation from purely spec biotech to, biotech which now has opportunity to generate significant revenues. Valuations are not the same.
Meetings at FDA usually occur around the 5th of each month to begin to announce approvals. I would suspect that VBLOC is getting through final signing papers and by October 8th, 2014, we will have a HALT.
That halt will be followed up within a a few months at most with BUYOUT from Medtronic, $ 7 range.
I did manage to post the article a little lower on this thread as it spoke of obesity linked to 2nd cancer in colon cancer survivors.
Sometimes you get the feeling that yahoo, Ernest Marmer, Adam F., seeking alpha, HFT and Hedge funds are all working together, each with its own function, all to maximize returns.
As I said, it is a feeling, my opinion, not based on facts and not making any accusations.