cjagadis: Many thanks for the kind words. ONVO does appear to respect open dialogue/debate about it. I think this reflects favorably on management's integrity and conveys a realistic understanding about the expected degree of scrutiny from investors in a public company. The firm's IR representative did contact me to clarify several points in my article that the company perceives as inaccurate. Per IR's request, I promptly reviewed the points and made several edits. The company was professional and respectful in its communications with me and its suggestions were, in my opinion, fair and reasonable. I want my article is as factually correct as possible.
I wouldn't say that the financiers made no/little effort in this transaction. There's much work to be done in going public. They are well compensated for their expertise, effort and skill, though. Great work if you can get it.
I went back and reviewed Mr. Murphy's retail investor presentation. The 2x-3x statement did, indeed, pertain to the amount of cash potentially to be raised. This would result in some share dilution. I will make the correction shortly.
Haxnbauer: I think you are misinterpreting some aspects of my article. I suggest that you reread it.
My comments on the exit strategy are spot on right. A pre-determined way to get out of an investment profitably is an integral part of the involvement of early investors, investment banks, VC’s, etc. This has been going on for decades. It is an integral of the venture capital/financing business model. A profitable exit is buttressed by the demand for the firm’s shares. This is why executives do presentations at investor conferences, emerging technologies symposia, etc. It doesn’t mean that anyone is doing anything untoward. It just means that it is very rare that the timing is right for a long investment in a firm at this stage of its corporate life. This is precisely why retail investors should avoid IPO’s, for example. Every new issue is overpriced right out of the blocks and a credible support level has not been determined yet. Poor timing.
Your “90% of the total capital raised” comment sounds, pardon me, quite naive. My point is the substantial pound of financial flesh that early investors, VC’s, investment bankers take for their involvement with an early stage company. Academics routinely state that this is fair compensation for the risks taken. All I know is that it is the cost of doing business and the cost of doing a financing deal with these entities. It ain’t cheap. ONVO’s take via the warrants does not reflect the total capital raised (based on the market price of a share). It is ONVO’s proportion of the total. The other stakeholders/investors got the rest. You may recall that Google (http://bit.ly/I2oi2V) totally bypassed the investment bankers in its IPO by offering shares via a Dutch auction. This enabled it to raise almost all the capital for its own use. This is the way it should be, should it not? Instead, there is an enormous cut taken by the financiers when companies access the capital markets. It is the cost of going public. Small firms don’t possess a thimble-full of the muscle necessary to go it alone. This, again, typically means that the timing is poor for a long position. The financiers have to exit, the market has to establish a sustainable demand for shares and the company needs to deliver the caliber of fundamental results that justify acquiring shares. Retail investors must be patient.
You discount the planned exit by 190 shareholders. The only comment I have in response is that you have no business managing your own investments (if this is what you do) if you do not see the significance of this information. It may be prudent for you to stick with index funds or index-linked ETF’s.
Your comment re “shady real estate types” also misrepresents my statements. Nowhere in my article do I impugn anyone’s integrity. The point I was making with the RERR section was that it had no value other than to a reverse merger suitor. The principals involved in the business just appeared to be inexperienced and ill prepared for the venture based on the information in the S-1.
And, lastly, I do not have a short position in ONVO nor do I have an advisory service or any other relationship where I would profit from the behavior of ONVO’s stock. My article is a follow on piece to my earlier submission re regenerative medicine.
dc: There are no "sides" to any investment. Just the facts, ma'am. I try my best not to get emotionally attached to any position. I'll change my opinion is a microsecond if I come across credible information that contradicts my thesis. Maybe I missed something. Maybe my biases discounted some realistic opportunities/risks. Maybe I misinterpreted some information. Whatever. If you believe that my article lacks credibility, then so be it. It's still just one opinion of certain aspects of ONVO's current situation. What's important is to be fully informed.
West: I have no position in ONVO, long or short. I also have no advisory service, investor affiliations or any other relationships that would benefit from the thesis of my article. I am an independent trader, a solo act. I wrote it as a follow-on piece to my regenerative medicine article.
Ben: SA has a formal factual dispute process so if ONVO believes that certain aspects of my article are incorrect, then it can contact SA with its specific points. SA will, in turn, contact me so I may revise the statements in the article that are confirmed to be inaccurate. My research is confined to public documents so the company may be able to clarify certain areas. If so, and my interpretation of events is proven inaccurate, then I will gladly make the corrections.
The 2x - 3x statement comes from Mr. Murphy's presentation. I'll go back and relisten to see if I misinterpreted his comments.
dc: I agree. I have ONVO on my long term watch list. If it can demonstrate that it can build its business in a meaningful way, then the it may warrant a closer look.
Jason: You're correct, the story of regenerative medicine/tissue engineering/bioprinting is what's driving the stock price. ONVO management is driving the story to retail investors. It is a sexy story, but the major results are far away.
The uplisting will happen. Whatever needs to be done to accomplish this will be done. The thing to look for once the listing is live, is institutional buy-in. If robust, then it bodes well for share price appreciation. This seems doubtful, though, because the market currently has a "show me the money" mentality. For example, Neuralstem (CUR) still sports a tiny market cap ($88M) despite impressive PI results in ALS patients. This tells me that the market still perceives substantial uncertainty vis a vis cell therapy despite concrete results with a pernicious disease. ONVO still lacks concrete results so I would be surprised if the institutions jump in this early.
Ben: I don't think that I am double counting the 32.1M shares. It is listed in the prospectus. As far as the specific timing of investor selling, I have no way of knowing.
It sounds like you have confidence in management and are satisfied with your investment. Good for you. The point of my article to look closely at what has occurred from a retail investor's prospective. The ultimate question is: Is now the right time to buy? It sounds like you got in earlier and have a nice gain from your basis. If so, you have more leeway with the share price behavior than someone looking to buy now. As far as ONVO goes, I will watch to see if it can build its business in a meaningful way. If several multi-million dollar deals are closed with big pharma in the next 3-6 months, then this bodes quite well for its value proposition. I want to see some significant uptake for its products/services before considering a long position.
And finally, I want to say that I do not perceive anything untoward from ONVO management. Their presentations, public disclosures, etc. are all factual, realistically positioned and devoid of the "we will be worth billions!!!-type" hyperbole that one encounters with other micro cap life science firms. The reflects well on their credibility and integrity.
User: The thesis of my article is not that there in no viable business. There is one, but it will be relatively modest in the near/medium term while the commercial potential of tissue therapeutics is years away. My point is to have realistic expectations about where ONVO is and what it will take to realize some to the lofty expectations some observers have.
ONVO plans to apply for an exchange listing this summer, probably NASDAQ. This clearly expands the population of potential investors. I would watch for institutional buy-in, specifically the number of mutual funds establishing a position.
I think you are misinterpreting the 99.7% figure. This means that it is almost a complete cash out by 190 shareholders. The timing of the sales are up to them so, if they're in not a panic, they will sell shares over time in order to avoid upsetting the market. My point is that, if the future is bullish, why are some many investors selling? I look at what people do, not what they say.
ONVO's piece is on http://bit.ly/10RkFUf. You have to join (it's free) to gain access to Mr. Murphy's presentation.
Noreika: Good question. As I'm sure you've noticed, I usually write an article in response to something that I perceive to be "anti-retail investor". I have expertise in life sciences and this is where many of the P&D's reside so I have devoted more attention to this area than I would prefer. I do have some companies on my radar so I may get around to writing some articles at some point. I write in my spare time so it takes awhile to complete one. As you can see, I'm not a prolific article submitter.
Ben: The tendered shares in the 4/4 prospectus are existing shares so there is no dilution. It's just that 190 shareholders intend to sell 1/2 of the float. This should create substantial downward pressure on the price until all the shares clear. This is why ONVO's road show presentations are retail focused. If executed well, retail demand could support the price during the exit considering ONVO's tiny market cap and modest trading volume.
Society And The FDA Are Ready For Acura, Are You? [View article]
I have no idea about the nature or timing of any FDA decision re abuse deterrence. My opinion, though, is that any mandate will apply to new products (non-FDA approved) and that current FDA-approved versions will be allowed to remain as is (at least in the near/medium term). And what will be the fate of already-submitted products, like Zohydro? This is the interesting area. Zohydro is a superb product that's very effective, but does not contain abuse deterrent technology. The review committee voted almost unanimously against approval because of this. The FDA decision is due any time. Bulls believe that Zogenix will be approved, but will have to agree to incorporate anti-abuse technology post-approval. Bears believe that it will be rejected and Zohydro will have to be resubmitted after the incorporation of anti-abuse technology. ZGNX is a superb straddle trade because of this bipolar situation.
Society And The FDA Are Ready For Acura, Are You? [View article]
It's still one person's opinion. What is the nature of the DA's research? Did Mr. Bovett travel to Mexico and interview all related parties including the cartels for his information? I doubt it. I assure you, copious quantities of meth will continue to travel north from the country that brought us tequila.
Organovo: Get Rich Or Die Tryin' [View article]
I wouldn't say that the financiers made no/little effort in this transaction. There's much work to be done in going public. They are well compensated for their expertise, effort and skill, though. Great work if you can get it.
Organovo: Get Rich Or Die Tryin' [View article]
Organovo: Get Rich Or Die Tryin' [View article]
Organovo: Get Rich Or Die Tryin' [View article]
My comments on the exit strategy are spot on right. A pre-determined way to get out of an investment profitably is an integral part of the involvement of early investors, investment banks, VC’s, etc. This has been going on for decades. It is an integral of the venture capital/financing business model. A profitable exit is buttressed by the demand for the firm’s shares. This is why executives do presentations at investor conferences, emerging technologies symposia, etc. It doesn’t mean that anyone is doing anything untoward. It just means that it is very rare that the timing is right for a long investment in a firm at this stage of its corporate life. This is precisely why retail investors should avoid IPO’s, for example. Every new issue is overpriced right out of the blocks and a credible support level has not been determined yet. Poor timing.
Your “90% of the total capital raised” comment sounds, pardon me, quite naive. My point is the substantial pound of financial flesh that early investors, VC’s, investment bankers take for their involvement with an early stage company. Academics routinely state that this is fair compensation for the risks taken. All I know is that it is the cost of doing business and the cost of doing a financing deal with these entities. It ain’t cheap. ONVO’s take via the warrants does not reflect the total capital raised (based on the market price of a share). It is ONVO’s proportion of the total. The other stakeholders/investors got the rest. You may recall that Google (http://bit.ly/I2oi2V) totally bypassed the investment bankers in its IPO by offering shares via a Dutch auction. This enabled it to raise almost all the capital for its own use. This is the way it should be, should it not? Instead, there is an enormous cut taken by the financiers when companies access the capital markets. It is the cost of going public. Small firms don’t possess a thimble-full of the muscle necessary to go it alone. This, again, typically means that the timing is poor for a long position. The financiers have to exit, the market has to establish a sustainable demand for shares and the company needs to deliver the caliber of fundamental results that justify acquiring shares. Retail investors must be patient.
You discount the planned exit by 190 shareholders. The only comment I have in response is that you have no business managing your own investments (if this is what you do) if you do not see the significance of this information. It may be prudent for you to stick with index funds or index-linked ETF’s.
Your comment re “shady real estate types” also misrepresents my statements. Nowhere in my article do I impugn anyone’s integrity. The point I was making with the RERR section was that it had no value other than to a reverse merger suitor. The principals involved in the business just appeared to be inexperienced and ill prepared for the venture based on the information in the S-1.
And, lastly, I do not have a short position in ONVO nor do I have an advisory service or any other relationship where I would profit from the behavior of ONVO’s stock. My article is a follow on piece to my earlier submission re regenerative medicine.
Organovo: Get Rich Or Die Tryin' [View article]
Organovo: Get Rich Or Die Tryin' [View article]
Organovo: Get Rich Or Die Tryin' [View article]
The 2x - 3x statement comes from Mr. Murphy's presentation. I'll go back and relisten to see if I misinterpreted his comments.
Organovo: Get Rich Or Die Tryin' [View article]
Organovo: Get Rich Or Die Tryin' [View article]
The uplisting will happen. Whatever needs to be done to accomplish this will be done. The thing to look for once the listing is live, is institutional buy-in. If robust, then it bodes well for share price appreciation. This seems doubtful, though, because the market currently has a "show me the money" mentality. For example, Neuralstem (CUR) still sports a tiny market cap ($88M) despite impressive PI results in ALS patients. This tells me that the market still perceives substantial uncertainty vis a vis cell therapy despite concrete results with a pernicious disease. ONVO still lacks concrete results so I would be surprised if the institutions jump in this early.
Organovo: Get Rich Or Die Tryin' [View article]
It sounds like you have confidence in management and are satisfied with your investment. Good for you. The point of my article to look closely at what has occurred from a retail investor's prospective. The ultimate question is: Is now the right time to buy? It sounds like you got in earlier and have a nice gain from your basis. If so, you have more leeway with the share price behavior than someone looking to buy now. As far as ONVO goes, I will watch to see if it can build its business in a meaningful way. If several multi-million dollar deals are closed with big pharma in the next 3-6 months, then this bodes quite well for its value proposition. I want to see some significant uptake for its products/services before considering a long position.
And finally, I want to say that I do not perceive anything untoward from ONVO management. Their presentations, public disclosures, etc. are all factual, realistically positioned and devoid of the "we will be worth billions!!!-type" hyperbole that one encounters with other micro cap life science firms. The reflects well on their credibility and integrity.
Organovo: Get Rich Or Die Tryin' [View article]
ONVO plans to apply for an exchange listing this summer, probably NASDAQ. This clearly expands the population of potential investors. I would watch for institutional buy-in, specifically the number of mutual funds establishing a position.
I think you are misinterpreting the 99.7% figure. This means that it is almost a complete cash out by 190 shareholders. The timing of the sales are up to them so, if they're in not a panic, they will sell shares over time in order to avoid upsetting the market. My point is that, if the future is bullish, why are some many investors selling? I look at what people do, not what they say.
ONVO's piece is on http://bit.ly/10RkFUf. You have to join (it's free) to gain access to Mr. Murphy's presentation.
Organovo: Get Rich Or Die Tryin' [View article]
Organovo: Get Rich Or Die Tryin' [View article]
Society And The FDA Are Ready For Acura, Are You? [View article]
Society And The FDA Are Ready For Acura, Are You? [View article]