The risk with Velti is that it stays in business. It is in a good space with outstanding operational leverage. Orbitz has the same operating model from a leverage standpoint, and just a little bit of good news can really move it. Veli's market cap is less than $100 million. Was 8 times that at one time. Past that, who the heck would short a dollar stock? The risk/reward calculation is ridiculous.
Any possibility the news will come out at the convention they are presenting at today?
I've been long this puppy now and again, but even though the technology seems to be in demand and valid, the way that the company handles communications and its shareholders in general is of concern. There is a big difference between a new technology and the ability to realize profit from it. Think Tevo, Atari or Serius radio. This could be dead money forever.
I don't think they are ready for Accounting 101. I would start with basic math since he left out cost of goods sold.
Forget the Phase 1, Phase 2 #$%$. and spec buys of biotechs. Unless this thing is a total fraud, which seems unlikely since Medicare did the due diligence for us, there is almost a perfect chance that you can make money from here. What other micro-caps have a Medicare reimbursable product with a broad target market? I can't think of any. The ball is in Precision's court. If they can sell, we're good. According to Inc. Magazine, Precision sales went from $28 million in 2010 to $38 million in 2011. 200+ employees. Hold your breathe, this could be a great one.
We're not too far away. Medicare reimbursement started in July. By the next quarterly call we should see something positive. A typical nursing home bills 2 or 3 million $ per year to Medicare. I owned 5 at one time and know what I'm talking about. The market cap of Rosetta is less than $50 million. They can have $10 or $20 million in sales very quickly if the Precision sales people can get the ball rolling.
From the RNAi blog:
The importance of Medicare coverage (other major insurance companies usually follow Medicare’s lead) is also illustrated by the OncotypeDx test which can probably be considered the most successful of that type of expression-based molecular diagnostics in the space: launched in early 2004, it sold a mere $400,000 a quarter the year thereafter. When it, however, received Medicare coverage in early 2006, sales exploded 10-fold. Today, Genomic Health is selling around $200M worth of that test annually and sports a market capitalization of a billion US dollars- 100x that of Rosetta Genomics. Numbers for Pathway Dx are more difficult to come by as it is privately held (it completed a $30M financing in 2010 though).
Sentiment: Strong Buy
The market cap is about $50 million if my math is right. Title 18 reimbursement will really be the driver of course. Based on my work, other firms that look similar have market caps in the $150 million range, so I'm guessing if their technology catches on that the stock can triple from here to about $15 and then rise from there depending on sales and competition. The problem with biotech is that all the stories are so compelling. Consequently a firm that has already been approved for Medicare reimbursement has a large lead on the others. Becoming Medicare eligible is not easy and frankly shows a level of sophistication on behalf of management. Like everyone else who is long, I am hoping for the best.
The stock will drop below 5 next week with the summer update. The September 5 call will go to 10 bid /15 ask. If this plays out, i'll be buying the 5's at 15 cents or less. The stock will then begin to rally up to $5.50+ by expiration.
I was at Great America yesterday and was asking the ride operators how the summer was going. Apparently, the hot, dry weather in June has boosted attendence. They almost all told me they never saw it so busy. They told me that July is when the park really starts to fill but that this year it started in early June. I don't know if it can be extrapolated to the other parks, but one of the complaints of the last couple years was bad weather translating to lower attendence. I can't imagine a better than expected summer would not boost the price back to $6 or more.
I agree. Initially I thought it was a short sqeeze, but it is still hovering here a couple weeks later. Still, my guess is that it will be trading in the mid-40's in a few months. The news is out there. Who is buying this stuff?
Steve Jobs owns over half the outstanding shares. There is also a good institutional presence. The balance is owned by the small investor. If you watch the price action, you'll notice that the average trade is a 100 share lot. The daily trading are these periphery shares. Jobs is not selling and the institutions will only sell en mass with bad news.
That's why I think the next move will be down. Good news won't move the stock too much, since that is expected. Bad news will cause the little guy and the institutions to run. Great company, great minds, but the risk/reward in the short term is high.
Everything is in the price. S&P wrote about 40 million home DVD sales 2 months ago. Great company, great product, great future, but priced for perfection. Run while you still can.
This is like 3 years ago when Warren Buffett was the idiot for not buying into the tech story. At the end of the day the stock price has to represent the discounted future cash flows. If you calculate that for PIXR, even without Disney's take, the numbers are still unsustainable.
If you watch the volume, you'll see that it is trading basically in 100 share lots. The big boys are not trading this. It's the little guys. Could even be a little short squeezing right here.
S&P pay service rates this an aviod and Morgan Stanley, for what its worth, has a 12 month price target of $45. I think that if a deal is reached with Disney the stock will fall and if there is no deal with Disney the stock will fall. High flyers only fly for awhile i.e. FRX, KSS etc.
Pixar is a great company with great products in an easily leveraged business. Still, it is already in the stock price. Went short at $70.
No one expects PIXAR to have another Toy Story size hit. It has to be a Monster's or a Nemo or nothing. That's a problem.