You may be right, formal approval and initiation of next phase of the BARDA contract may come later this year. However, we should learn by mid-year whether the "principle objectives" of the initial phase were accepted, and if so, then we can reasonably infer with confidence that the "next steps" will include moving on to the next contract phases. Investors will discount this good news in advance of the formal award of the additional phases of the contract:
"Cytori submitted a series of reports to BARDA, which it believes demonstrate that the Company has achieved the three principal objectives of the base contract that may qualify Cytori to receive additional phases of the master contract worth up to $101 million for continued product development and clinical trials. The Company expects to obtain a decision from BARDA on the acceptance of these objectives and next steps in the first half of 2014."
"what cytx has is patents for procedures...that is more valuable than the machines, which are similar to cotton candy machines..."
I think it's better to view the machines as the razor and disposables as the blades. The more razors out there, the more higher margin blades one can expect to sell. Good clinical and investigator results and favorable regulatory treatment (e.g., BARDA, Japan, China) will facilitate the placement of razors and the use of blades.
Looks like the buyers are getting more aggressive today which means the brief sell on the news puking may be over. This continues the recent trend of ongoing accumulation and may successfully defend the technical uptrend support. Interesting that the warrants are bid and traded higher than the Sep $2.50 call options are offered. Speculators should buy the options for 80 cents rather than paying more for the warrants.
"I am hoping there will be support in the $2.65 area perserving the uptrend..."
I agree. CYTX bottom at $2.00 (11/01/13) was followed by a higher lows at $2.20 (12/17/13) and $2.44 (02/05/14). Your $2.65 looks to be support for this trend line so let's hope it holds. My guess is it will hold if tested as there should be buyers willing to take shares at a 11.7% discount to Lorem ahead of what could be decent news ahead.
Regarding CYTX's need to raise more cash, I agree that they will do so later this year. While JD correctly points out that warrant exercises and BARDA could get them to the end of the year when they hope to be at cash flow breakeven, cash reserves would probably be too low so they should refill the till before then. This will probably be true even if Chinese regulatory approval comes sooner rather than later and triggers Lorem orders. But the key is that if BARDA moves forward, Chinese approval happens, orders from Japan pick up in anticipation regulatory changes, ATHENA enrollment is completed and ATHENA II enrollment goes well, then the stock should be much higher which implies a much lower cost of equity capital and acceptable shareholder dilution. What we want to see is good operating performance so that the next secondary is done at a much higher stock price.
Still, AT&T isn't wrong in pointing out that things have changed since it first expressed interest in Europe, most significantly the gap between its valuation and Vodafone's. While AT&T's stock once traded at a premium to Vodafone, excluding Verizon Wireless, it now trades at a discount: 5.6 times 2014 earnings before interest, taxes, depreciation and amortization, against 6.7 times for Vodafone. For AT&T, that makes it even less appealing to do a deal that already came with few apparent synergies and questionable growth opportunities.
And it has other options. A U.S.-focused AT&T might be better served, for example, by buying Dish Network. DISH -0.61% AT&T would likely need to pay a significant premium to get Dish's chairman, Charlie Ergen, to cede control. But buying Dish would give AT&T access to the wireless spectrum that the satellite-TV provider has amassed. This would help AT&T defend its existing wireless business and keep that spectrum out of competitors' hands.
Investors shouldn't stop reading between AT&T's lines. But they may be better off if its recent comments aren't bluster, just straight talking.
AT&T Should Phone Home
The Company's Pessimistic Signals About a Deal With Vodafone May Be Just Tactical, but Investors Could Do Without That Deal
AT&T T +0.05% seems uneasy about springing for that long-distance call to Europe. And that could be a good thing for its shareholders.
Chief Financial Officer John Stephens said Wednesday that AT&T's "window of opportunity" for buying a European asset may be closing. His comments echoed Chief Executive Randall Stephenson's last week.
Mr. Stephens said AT&T still sees opportunity in Europe, but that the success of its own investment plan and new competitive threats such as a potentially combined Comcast-Time Warner Cable had put its focus "clearly" on the U.S.
AT&T may simply be trying to drive down the price of its rumored target, Vodafone. VOD.LN -1.33% The latter's shares have fallen nearly 8% in the past week. While it made sense for AT&T to broadcast its intentions in Europe while trying to lobby regulators there, it makes less sense now. Verizon Communications's VZ -0.20% deal to buy the rest of Verizon Wireless from Vodafone has closed, clearing the way for AT&T.
AT&T is limited for the next few months to doing a deal backed by Vodafone's board because of U.K. takeover rules. Its recent comments may also have been aimed at pressing Vodafone to initiate deal talks.
Mr. Stephens cited progress in Europe toward rolling out LTE networks—a shift AT&T had hoped to benefit from—as an opportunity that might be slipping away. Vodafone recently launched its own investment program. But spending on that is just beginning, suggesting there may still be time for AT&T to capitalize on it.
Smalls, as far as timing goes, this makes a summer or 2H14 deal most likely:
"But it’s a technicality that now means under U.K. takeover rules, AT&T can’t approach Vodafone until the summer. The companies can, however, hold talks sooner if they are initiated by Vodafone."
Recent T chatter may be sweet talk meant for VOD, but it may be falling on deaf ears. Barron's Tech Trader Daily says,
"At a conference Wednesday, AT&T (T) Chief Executive Randall Stephenson repeated a warning that the window for a wireless deal in Europe may be closing. AT&T is attempting to bring Vodafone Group (VOD) ”to the table and condition its expectations about price,” writes Thomas Gryta in the Wall Street Journal. (See “Takeover Time? AT&T Winks at Vodafone, Then Winks Harder,” subscription required."
Rothco, thanks for posting Roth report. As a bull, Roth's views paint an encouraging picture. It's risky, but there are a several potential material positive catalysts on the horizon. After years of disappointments and delays, things may finally be moving in the right direction. If investors really thought yesterday's news was bad the stock would be trading closer to $2 rather than just below $3. More weak hands are bailing, but it appears there is substantial new investor interest taking the shares. Let's see if it finishes over Lorem's $3 today...
"...lots of thumbs down...you must be right"
LOL - Lots of thumbs down - like spam!
Aggressive hitting bids out of the gate this morning. Lots of selling on the news as well as broad market weakness and an underperforming biotech sector sent it as low as $2.81. Some large bidders were in there picking up shares, and now the stock looks like it is trying to rebound. It would be very encouraging if it closes over Lorem's $3 today.
Overall I thought the news was encouraging. BARDA is moving forward and there is a good chance things go well. The possibility of a QOL endpoint for cardiac indication is a big deal. Significant progress should be made in Asia this year in Japan and China. We should see some progress from Lorem too. RECOVER could be another catalyst this year. While later than expected, ATHENA finally looks to be on track. So while there are many risks, if the broad market and biotech sector do well, then CYTX could have a very good year this year. The Roth presentation should provide further clarity for investors about positive outlook and potential for the firm.
Faber on CNBC reported that T's CFO reiterated "window may be closing" comments at this morning's DB conference presentation. Reportedly he said T's focus will be in the US which of course is stating the obvious. CEO & CFO really downplaying possibility of VOD buyout. Of course, they are not saying they are no longer interested...
"Still believe this will be a friendly deal"
I agree Smalls, if it happens, it will be friendly. And a friendly deal will take time to negotiate, plan, analyze and approve. I think getting the important details (price, operating plan, financing, regulatory plan, etc.) worked out is far more important than worrying about short term rate or currency fluctuations. As I said before, as long as reasonable cost debt and equity financing is available to T, the train is still in the station.
If VOD was not interested in a T buyout, then they could "just say no" and signal that publically. Or they could seriously consider or pursue other options, such as a possible minority investment in VOD from China or elsewhere. This could block or hinder a T bid so they could remain independent.
Whether T buys VOD or whether they go it alone, with or without a minority investor partner, I think VOD's future looks good and is well worth buying and holding. I think we'll hear one way or the other about a T buyout in 2H14, with my best guess sometime this summer.
Hi Nigeco, I think the weakness results from several factors: raised bid, late Friday FT article, broad market nervousness... I agree that the FT piece cherry-picked some comments to weave a negative view. However, I view those comments as a normal and expected part of an ongoing public negotiation. T prefers to see weakness in VOD's stock and they are not going to talk it up with buyout hype. As far as I am concerned, the buyout train is still in the station as long as debt and equity financing is available to T. BKB
You make a good point Smalls - phone companies are trying to transition from charging for the phone over time to transparently paying for it up front. In doing so, companies avoid the big up front subsidy hit that is recovered over the life of the contract. But now that consumers are finally getting the option, perhaps we'll see that more folks will keep their old phones longer and lower their monthly bill.
Even after adjusting for this factor, there is a price war in progress as the cost per quantity (minutes, texts, data) of usage is falling. This should become more obvious a year from now if it continues. As with any consumer technology, competition brings lower prices and better service. If you expect future wireless prices to be stable or rise, I think you're on the wrong side of history!
Perhaps T's ongoing battle for domestic share adds urgency to possible VOD purchase. Increasingly competitive US wireless market is good for consumers, but not necessarily for providers. I'll be swapping my VZ for VOD sooner rather than later:
AT&T Again to Cut Prices for U.S. Wireless Plans
Move Comes as Providers Battle for U.S. Market Share and Seek to Trim Subsidies
"AT&T is cutting prices on its wireless plans for the second time this year, amid an aggressive campaign for its customers by smaller rival T-Mobile US Inc. and a longer running goal to move subscribers away from phone subsidies.
The cut, effective Sunday, lowers the monthly cost of a plan offering unlimited calls and texts on one smartphone, along with two gigabytes' worth of Internet use, by $15, a drop of 19%. But to get that price, subscribers must either use a phone they already own or pay full price to buy a new one.....
AT&T and Verizon have responded to T-Mobile's success by moving away from contracts themselves and lowering prices on some plans. Last month, AT&T sharply cut the cost of some plans where families share large buckets of data, as long as those subscribers don't receive subsidized phones.
The new price cut allows customers to get one line and two gigabytes of data for $65 a month, down from $80, or to get two lines and share the data for $90 a month, down from $105. AT&T also continues to offer a $100 credit to new or existing users who add a line of service.
The new rates are significantly cheaper than those at Verizon, which sells a line with two gigabytes of data for $80 a month as long as subscribers buy their phones at full price through the carrier's installment plan.
T-Mobile sells a line with three gigabytes of data for $60 a month, also requiring subscribers to bring or buy their own phone....."
"Lately, some researchers have come up with ways to detect specific emotions and how they affect stock moves. Richard Peterson, founder of MarketPsych, analyzes text in news stories, social media and other sources to estimate whether investors feel, say, "joy" or "trust" about specific stocks and sectors.
In particular, Mr. Peterson has found that anger—for example, a series of tweets about the Apple chief executive that say "Tim Cook is an idiot!"—is a better predictor of good returns than general bearishness. In international stocks, future returns are better when investors feel that a country's government is unstable, he says."
I guess this means we want to see more chronic complaining about CYTX and its management!
I agree Smalls, there are probably several reasons for the weakness. Ukraine seems like a bigger potential risk than VOD bumping up its bid. T is not interested in cable, but VOD's recent moves should not materially reduce its overall attractiveness as an acquisition. Have a good weekend, BKB.
Exclusive-Vodafone reaches preliminary deal to buy Spain's Ono: sources
MADRID (Reuters) - British telecoms group Vodafone (VOD.L) has reached a preliminary deal to buy Spanish cable group Ono after revising up this week an initial bid for the company, two sources with knowledge of the discussions said on Friday.
"A meeting took place yesterday between the shareholders and (Vodafone Chief Executive) Vittorio Colao. The due diligence will start this weekend in order to make the offer binding," said one of the sources.
A second source said Ono's private equity shareholders told Vodafone at the meeting that the offer would have to be "substantial" and come before March 13, when the cable group is due to formally go ahead with a planned initial public offering to list on the Madrid stock exchange.
Both Ono and Vodafone declined to comment.
The stock is finally acting better. I think many were encouraged by comments on the last call. They even mentioned a desire to pay a dividend at some point. The secondary snafu is behind us, acquisition financing is clarified, and they should have sufficient capital for additional buying power. Expected deliveries will steadily ramp up capacity and growth over the next few years. All we need is for rates to cooperate and this stock should do very well.
Hedge, I agree with your view that the "back and forth trade looks like accumulation." Obviously the stock has not gone up in a straight line but buyers seem to be a bit more aggressive than sellers. This pattern has been going on for quite some time now and I expect it to continue. But given there are a lot of underwater shareholders, there are always more sellers as the stock rises. What we need now for the stock to make a bigger move up is some decent news, which will increase buyer aggressiveness and prompt sellers to back off.
By the way, I also find various YMB bugs, including "access" issues, irritating. Same with the copycat spam bot posts that JD complains about. There are plenty of competing investor message boards out there so hopefully they get their act together before they lose share!
NEW YORK, March 5 (IFR) - Any concerns about AT&T's desire to expand abroad didn't stop the telecom giant from attracting about US$6bn of demand on Wednesday morning for its first bond deal so far this year.
Bookrunners Bank of America Merrill Lynch, Goldman Sachs and Wells Fargo Securities closed the books at 11:30am, having garnered more than enough interest for the offering of five-year fixed and floating rate notes as well as AT&T's first 10-year offering since 2012.
The last time the company came to market was in November last year, when it issued US$400m of five-year floating rate notes maturing in November 2018 at 3mL+91bp, and US$1.6bn of 2.375% fixed-rate securities with the same maturity date.
The new deal includes a benchmark five-year, rated A3/A-/A and whispered at 85-90bp, and a 10-year with initial price thoughts at 135-140bp.
Comparables include AT&T's outstanding 1.4% November 2018s trading at T+60bp, or G+71bp; and Verizon's Baa1/BBB+/A- September 2018s, trading at T+60bp or G+80bp.
The new 10-year's whispers compare with AT&T's outstanding 2.625% December 2022s at T+98bp or G+120bp; and Verizon's 2.45% February 2022s at T+105bp or G+128bp; and its 5.15% September 23s at T+130bp or G+138bp.
AT&T was heavily rumored last year to be interested in buying Vodafone Plc. Rumors have swirled in the markets in the past week that it might also be considering cable assets in Europe.
British law required AT&T to respond to rumors last year that it was contemplating a purchase of Vodafone.
It said it wasn't pursuing such a deal, but analysts have interpreted that to mean that AT&T didn't want to rush a merger.
"The decision means that the company cannot acquire Vodafone over the next five months unless it obtains the approval of the Vodafone board," said Dave Novosel, strategist at Gimme Credit.
"But we suspect that Vodafone is still under consideration."