Bioamber has significant short interest, up every month since last Sept from 200,000 shares to over 950,000 shares in mid-August. Major bets that Bioamber will not succeed in their first full scale production plant at Sarnia and face a cash squeeze by the end of this year, early 2016.
Bioamber Director purchased 40,000 shares on August 6, at just under $6/share. That information was released today and probably caused the 15% rise. He now owns 120,000 shares so it is a vote of confidence. Management needs to get the plant operational this quarter and then start production ramp-up and deliveries. I would also expect some positive news to be reported by Bioamber management on initial milestones achieved over the next month.
A bad week for shareholders. Earnings call did not give investors any confidence that plant will start production in Q3. Increased borrowing at end of July. CEO Promises to start production at end of September. If that fails and plant is not up/running by end of year, cash crunch will be severe and stock may drop below 3... Downside risk very high.
Bioamber has had very small trading volume--stock has been going up or down 3-5% each day with fewer than 30K shares trading each day this week. Need positive news about Sarnia plant start-up at earnings call on August 4 and a projection when actual first batch production shipments to have any sustained stock move to upside. Only with more certainty on this large scale plant can the stock or company move forward. Company promised more news at June 9 briefing on Sarnia "The next steps will include running initial fermentations and testing the purification equipment to confirm that the plant is producing bio-succinic acid that meets specifications. These activities will be carried out over the next two months...The Company plans to communicate on the outcome of these steps as the plant moves toward commercial operation."
official ribbon cutting, same day as quarterly report. I assume we will get status report on plant start-up and hopefully visibility on when we can expect actual product deliveries to begin. The key to stock performance requires a positive report followed by flawless execution.