How bloggers are profiting off false narratives
Atlanta, GA, May 18, 2020 (GLOBE NEWSWIRE) -- Co-Diagnostics Inc. (CODX) has seen a huge jump in their stock since February, mostly due to its Covid-19 related test. The company has also seen their share of detractors over the last several months as well, including a plethora of short reports that have come out about the company over the last month alone. Most of these reports have accused the company of some egregious claims. Which makes some wonder, why go to great lengths and bash this company now? Also, what is the clear motive for so many attacks on this one small company? Let’s break this down to make sense of it all.
Hindenburg Research, Investor Place and Salt Lake Tribune Attacks
Hindenburg Research claims were that Co-Diagnostics partnered with PreCheck Health Services (OTC PINK: HLTY) to distribute the company’s Covid-19 tests in Ecuador. Also, that Co-Diagnostics published 34 press releases since January and never bother to disclose hard figures around the actual amount of sales or revenues it was generating.
The Salt Lake Tribune reported that Co-Diagnostics uses taxpayers’ dollars to fund their business. Also, that the accuracy of coronavirus tests by TestUtah.com has come into question. The newspaper quoted a doctor stating that there is no room for rookie in vitro diagnostics players.
There were several other short reports like Investor Place’s Ian Bezek report titled Dump Co-Diagnostics Stock. To say this article lacked subtlety is an understatement. Mr. Bezek’s approach was very simple, as the article stated: he wanted investors to dump the stock because of the same points mentioned above that he pointed out in the article.
The Facts About Co-Diagnostics versus the Shorts’ Claims
To anyone legitimately following the company, it’s clear it has done everything to the letter and deserves a clean bill of health. So why are all these reports out on this company? Before we answer that, here are the actual facts surrounding the company, free from negative bias.
- The FDA’s website hosts Co-Diagnostics EUA letter that they received, dated April 3, 2020. In this letter the FDA lays out that after their due diligence they found Co-Diagnostics’ test acceptable for emergency authorization. This is a big deal as not all companies receive this authorization. Also, the company had to pass all the FDA’s protocols to get this authorization. Anyone who has been around the healthcare industry or biotech and the FDA understands the significance of the FDA allowing a company to sell its products in the United States.
- Clearly, Hindenburg Research didn’t read or mention the press release on March 20, 2020 by Pre-Check Health Services Inc. announcing that they ordered and paid for 37,500 Covid-19 tests. If they did, they would know that Co-Diagnostics was not partnered with this company in any way; Pre-Check Health is just a customer of Co-Diagnostics, and clearly one of several given the revenues Co-Diagnostics has reported. Pre-Check Health Services is a non-reporting company that resells medical devices which is described on the company’s profile. https://www.otcmarkets.com/stock/HLTY/profile
- In Q1, 2020, the company netted roughly $18 million through three direct offerings. That cancels out the Tribune’s report that the company is supported by taxpayers. And the direct quote from the doctor in that same article, obtained through an open records request after only being distributed privately? Well, it was the opinion of a doctor who worked for a hospital in direct competition with one of the company’s customers. It would seem he does not like his competition. Why should he if they take business away from his employer?
- The company has continued to try to please its growing shareholder base by showing growth without giving financial guidance. Management know that by giving financial guidance would lead to critics saying projections are two low or to high and cause a stir in the market for those short-term traders trying to short the stock. Instead they put out consistent news showing significant progress and execution of their business. And the company clearly can’t publicize their list of clients or contracts and expose their client base to attacks from the rabid short sellers.
- The company announced in January that its CoPrimer platform, licensed by LGC, Biosearch, was successfully used by Bayer to develop assays for multiplex PCR. The technology works, and has been vetted at the highest level.
- On Jan. 23 CEO Dwight Egan announced that his company had designed the coronavirus test and that he was confident in their CoPrimer technology to differentiate between the similar genetic makeup in SARS, MERS, & the novel coronavirus. Those events bring us here.
Co-Diagnostics’ Covid-19 test was cleared for sale by the FDA, and has repeatedly shown stellar results in once independent evaluation after another for its test accuracy, on several continents. The company has surpassed every analyst revenue projection for the first quarter. The company has now put out guidance that shows profitability moving forward, and is in fact already profitable midway through the second quarter. Management has shown that they are committed to building a great company. This is the type of company that people look for when investing on Wall Street—one with solid fundamentals, in a growth industry, that is able to make a positive impact on life in the pandemic.
The “reporters” that have come out against this company have done so because they profit on the stock going down, and no false claim or half-truth is beneath them in their pursuit of this goal. However, in the end the only things that matter are facts, and results. All public facts directly contradict the shorts’ claims, and the company’s results have been nothing short of remarkable.
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