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Editor's note: This article covers a micro-cap stock. Please be aware of the risks associated with these stocks.

Celsion (NASDAQ:CLSN) certainly appears to be on its way to being revamped, and looking stronger so far after its Phase III earnings crash earlier in the year. Naturally, that's going to spawn new arguments from bears, shorts, and anyone else betting against the company.

It seems like every time Celsion seems to take another step forward, market-wise, there's usually no shortage of bearish myths or half-truths that somehow make their way out on to the investing public, causing them to tap the brakes and pull back on the price.

As I stated in my last article, those that have been invested in Celsion since before their post-Phase III crash in January 2013 are likely to be sitting on losses. Those that have invested afterwards, in what I call the "new" Celsion, are up 33% over the last three months. My first argument to reinvest in Celsion post-crash came when I wrote this article, claiming the new Celsion could, at some point, be worth $4/share.

(click to enlarge)

As the stock started its climb up over the $2 region, shorts and bears started to lick their chops. As it became clear that the company was going fall back a bit, bears established their short positions and sunk their teeth in, offering misleading blogs, articles re-hashing bad news that was already priced in, and in the case of saying things like "Celsion wasn't at ASCO," apparently just making crap up out of thin air. Sometimes, the shorts can't even seem to smell what they're shoveling.

And so, this week Celsion has been showing signs of strength again, testing $1.40 on Tuesday, causing those with disclosed short positions in Celsion to likely wet themselves and fire off more blogs and articles with half-truths and bearish spun news.

The purpose of this article is the same as my previous "myth dispelling" article - destroying the half-truths, myths, and conjecture used by shorts to give you the real story on Celsion.

(Majority of Data is From May 2013 10-Q)

Myth #1 - Celsion Is In "Dire Straits"

Okay, here's an easy one line answer to this one: No, they're not.

But, seriously, making the argument that a company with $45 million in cash and another $26 million in assets after that is in "dire straits" is just absurd. Especially when the company's own guidance was about a million a month in cash burn, with those costs still continuing to come down.

If we take a reasonable $800k/month cash burn, which is based on the company's guidance plus an assumed $200k/month cut (we'll know more when they file this week), that gives Celsion enough cash for 57 months, which is nearly 5 years worth of operating expenses.

That's five years to either acquire a profitable company, get something in the pipeline that's going to find success, or shift corporate strategy towards finding another leg for the company to stand on, should their liposomal delivery not be the winner that I think it's going to be for them.

It's the delivery, not the drug.

Myth #2 - Celsion's Last Hisun PR Was a Rehash

This one is probably the closest to being near the truth, but it's being cast in a negative light when it should be cast in a positive one. The facts are that Hisun still has Celsion's back in the Chinese market still clearly want full control of ThermoDox within the Chinese market, the most prevalent HCC market on the face of the Earth.

So, it's safe to say that Hisun still has an interest in Celsion, and that if they would have had beef with Celsion putting out that information in a PR again, they would have said something to stop them.

Let's not forget that Zhejian Hisun Pharmaceutical Company is a company already on the hook for $5 million that they forked over in anticipation of getting first dibs on ThermoDox in the case of successful results - and now they're still lending their name to Celsion - and that's bad news? In what universe?

So, I'm not really sure how repeating and reemphasizing that Celsion is going to be provided with non-dilutive financing from Hisun in the future is bad news? As a matter of fact, that's such good news, I'll do a little "emphasizing of my own," right here:

Hisun will provide Celsion with non-dilutive financing and the investment necessary to complete the technology transfer of its proprietary manufacturing process and the production of registration batches for China.


Myth #3 - Celsion is Doing A Reverse Split

Just as every company has the "authorization" to issue a certain number of shares, doesn't mean that they're going to do it. Many companies operate normally without ever getting near the amount of shares that they're authorized to issue.

In this case, Celsion is "authorized" to do a reverse split. Does that mean they're definitely going to do it? Absolutely not. Articles have been written like the company has came out and announced that they're going to be doing a reverse split. Logically, there's absolutely no reason at all for them to do a reverse split and to present the argument of "when the company does it" or "the coming reverse split" is a classic example of simply making things up.

As I said in my previous article when I debunked this already:

Furthermore, the reverse split thing is boilerplate stuff that tons and tons of companies "ask permission" for but never do. It's there in the case that the company can't find future financing, and is a risk that almost all companies in their microcap stage face.

Bringing it up now, when Celsion has substantial funding, is moot.

It's now been almost 3 months since the bearish "reverse split" argument came up, and guess what? Still no reverse split, simply all talk.

Myth #4 - Celsion Has Clear "Bad Intentions"

Oncology company trying to find cures for cancer just doesn't usually trigger the phrase "bad intentions" in my head. Not sure why.

Anyway, what does a slanted and defamatory statement like this even mean? They're an evil company? They're out for blood? This is a company that's striving to create something that will help out the global cancer epidemic. Explain, exactly, what the bad intentions are there?

It's clear that the only parties, which may actually have bad intentions here, are the parties that are starting to get in the habit of spinning the truth to make it appear negative in hopes of benefiting from Celsion's stock price going lower.

Already, however, it's looking like the market is getting used to this game, as Celsion has opened up 4% today already.


You could almost take this pushback as a sign that Celsion's doing something right. If bears and shorts are getting this vocal, they must really be backed into a corner at this point.

As I stated at the end of my last article destroying bearish myths, I am reiterating my bullish sentiment on Celsion and continuing to contest that this company could be worth $4 a share in the not-too-distant future. I'll be using any and all pullbacks on bearish myths to purchase more and add to my position. To Celsion longs, I wish you all the best of luck.

Disclosure: I am long CLSN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.