Seeking Alpha

Organovo falls; Citron suggests boiler room propping up shares

  • In a 4-page report (.pdf), Citron Research points out only 7.98% of Organovo's (ONVO -5.2%) shares are owned by institutions, and that the only sell-side firm providing coverage (JMP Securities) on the $819M company was a placement agent for a 4M-share offering. The firm declares it "cannot think of a stock with this high market cap and so little institutional ownership or analyst coverage."
  • Citron also suggests Japanese boiler room operation Kanagawa Associates has helped prop up Organovo's shares, and notes Swedish regulators have issued a warning about unauthorized cold-calling by Kanagawa aimed at convincing individuals to invest in Organovo.
  • Shares crashed in November after SA contributor Richard Pearson wrote a lengthy bearish column.
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Comments (30)
  • Weighing Machine
    , contributor
    Comments (691) | Send Message
     
    Can't wait for some genius on SA to attempt to refute this/ Pearson's case against this garbage company

     

    I remain short ONVO
    21 Jan, 01:48 PM Reply Like
  • elein1
    , contributor
    Comments (4) | Send Message
     
    I'll refute it. Just google Citron and ONVO and click on the CNBC Fast Money link where this Left guy is interviewed saying that this Japanese boiler room is inflating the stock. The CNBC host responds by saying they researched that accusation and that this Japanese boiler room has purchased zero shares of the stock and basically just kept the money of the investors who wished to buy it. This Left guy then backtracks and gets flustered. Seriously people, there's something shady about this guy. Listen to the way he speaks and if that's not enough, a simple google search shows that he's been arrested for fraud.
    22 Jan, 01:39 AM Reply Like
  • Weighing Machine
    , contributor
    Comments (691) | Send Message
     
    A quick review of Citron's track record will show you how very, very wrong you are. Good luck - in life I mean - you will need it!
    22 Jan, 11:30 AM Reply Like
  • royener
    , contributor
    Comments (7) | Send Message
     
    I have no current position in ONVO but have been both long and short the stock.
    The article has no credence with me as it is written by a short seller, it may be factual, however the language used does not fill me with confidence.
    this from wikipedia
    "Andrew Left (born July 9, 1970, in Detroit Michigan) is a notable activist short seller and author and editor of the online investment newsletter Citron Research"
    DYOD
    21 Jan, 02:16 PM Reply Like
  • Jeffjacobjames
    , contributor
    Comments (627) | Send Message
     
    Thank you Citron! $ONVO has a very promising future! Today's dip gave me a great chance to load up on this 3D-bio company! I expect ONVO to be bought by big-pharma company in next 6 - 12 months. Buy on these dips!
    21 Jan, 02:29 PM Reply Like
  • leonct74
    , contributor
    Comments (106) | Send Message
     
    One question..... Who is Citron Research!!!!!???
    It is an anonimuous web site.... Try to check in http://bit.ly/q8jCf0 if the site has any company behind.... I could not find any....
    21 Jan, 03:31 PM Reply Like
  • ECapo
    , contributor
    Comments (465) | Send Message
     
    leonct74..great question...I saw Andrew Left of Citron on CNBC Fast Money state he was short ONVO and would not comment if he was short on other 3D stocks....he stated his research was also from comments from Sweden...I noticed he has been mentioned by SA many times...shorting ..I did see this posted on the internet.....I wonder if the following is relevant?

     

    http://bit.ly/MpCol1

     

    Andrew Left of Citron Research convicted of fraud and barred from association with the National Futures Association
    ANDREW LEFT -

     

    THE PANEL FOUND THAT LEFT MADE FALSE AND MISLEADING STATEMENTS TO CHEAT, DEFRAUD OR DECEIVE A CUSTOMER IN VIOLATION OF NFA COMPLIANCE RULES 2-2(a) AND 2-29(a)(1). LEFT'S CONDUCT WAS INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE.

     

    CONSEQUENTLY, THE PANEL BARRED LEFT FROM ASSOCIATION WITH AND FROM ACTING AS A PRINCIPAL OF ANY NFA MEMBER FOR THREE YEARS; ORDERED HIM TO TAKE AN ETHICS TRAINING COURSE; AND PLACED RESTRICTIONS ON HIS ACTIVITIES FOR TWO YEARS WHICH PREVENT HIM FROM SUPERVISING ANY AP AND REQUIRE HIM TO TAPE RECORD AND LOG ALL CONVERSATIONS WITH CURRENT AND POTENTIAL CUSTOMERS.

     

    21 Jan, 06:47 PM Reply Like
  • kesef10
    , contributor
    Comments (14) | Send Message
     
    Was the Citron Research published in the Onion ?
    21 Jan, 04:13 PM Reply Like
  • martyoo
    , contributor
    Comments (7) | Send Message
     
    From his Wiki page

     

    "Since 2001, more than 50 companies covered by Left have become targets of regulatory interventions."

     

    http://bit.ly/OJnSV9

     

    I would say he has at least some credibility based on his record. Certainly more than most on here.
    21 Jan, 04:19 PM Reply Like
  • ECapo
    , contributor
    Comments (465) | Send Message
     
    leonct74...I think their disclaimer says it all .......

     

    "Disclaimer:
    Citron does not guarantee in any way that it is providing all of the information that may be available. We recommend that you do your own due diligence before buying or selling any security. At any times the principals of Citron might hold a position in any of the securities profiled on the site. Citron will not report when a position is initiated or covered. Each investor must make that decision based on his/her judgment of the market."
    and as above SA states " Citron also suggests"...I do not know why SA would print this .....and send it to over 13,842 people...and again I do not know why they mentioned "Shares crashed in November after SA contributor Richard Pearson wrote a lengthy bearish column."
    It would have been more unbiased if they mentioned the stock rise on articles of longs and those of unbiased authors....can you mention what is going on here with SA?
    This is an opportunity for Investors here to pick up more ONVO...!!!!
    21 Jan, 04:20 PM Reply Like
  • Doug Dallam
    , contributor
    Comments (8045) | Send Message
     
    Well, one thing that is suspect is this comment "The firm declares it "cannot think of a stock with this high market cap and so little institutional ownership or analyst coverage."

     

    That means they aren't looking too hard. Checkout Nokia's institutional holding at 30B Cap.
    21 Jan, 04:53 PM Reply Like
  • aow
    , contributor
    Comments (135) | Send Message
     
    Nokia has plenty of analyst coverage and more inst'l ownership last time I check (a little over 10%). That being said, the lower institutional ownership in Nokia is likely because it's a dying firm... not exactly a ringing endorsement.
    21 Jan, 07:33 PM Reply Like
  • stevepitt
    , contributor
    Comments (2) | Send Message
     
    That's because NOK is an ADR. Institutions own shares directly in the shares traded in Finland.
    21 Jan, 07:58 PM Reply Like
  • joemarko
    , contributor
    Comments (25) | Send Message
     
    I have it at 2.00 and if it takes 20 years, I still believe they have something.
    21 Jan, 06:15 PM Reply Like
  • PAW510
    , contributor
    Comments (2) | Send Message
     
    This stock is going to be volatile until Organovo starts selling their printed liver slices to medical institutions on a mass scale for medicinal tests and get approval for their other planned organ printings. Then this stock will skyrocket. Until then, play the volatility, (buy the dips and sell close to the relatively recent highs) and build up your holdings of this stock. This one will make you rich in the near future...
    21 Jan, 06:40 PM Reply Like
  • Joeblow34240
    , contributor
    Comment (1) | Send Message
     
    ONVO was mentioned in Popular Mechanics last month. I'm long ONVO, there has to be something to it.
    21 Jan, 06:40 PM Reply Like
  • J Michael McKay
    , contributor
    Comments (28) | Send Message
     
    Onvo is resilient. Watch the coming pop.
    21 Jan, 07:01 PM Reply Like
  • Rustbelt Bill
    , contributor
    Comments (4) | Send Message
     
    I think many people are condemning this stock because they think ONVO is seeking to make human organs for installing in humans. Not so. They are trying to make organs which can serve as replica organs for quicker and better testing of drugs, procedures, etc., to replace use of pigs, mice, frogs, etc. If they can do it, they'll make money. This is not Frankenstein medicine. Not yet, anyway. That comes later...
    21 Jan, 08:10 PM Reply Like
  • omeshrin
    , contributor
    Comments (22) | Send Message
     
    Left is an interesting character and (in spite of his criminal activity) I think, in the past, he aptly pointed out companies that deserved to be investigated and scrutizined and it's important to have people like him to keep the market in check (I think Organovo is no exception to scrutiny), but I see nothing worth noting in his attack on onvo. He has a short position, clearly, and wants to cover and the way he spoke on CNBC reeked of desperation, not intelligence.

     

    I like to base things on what I see happen, not on what someone tells me. And what I see is positive.
    What I see is a company that's consistently reaching milestones with a terrific Board of Directors that has proven experience working and dealing with some of the biggest companies in the world. I *do* believe the company is slightly overvalued at this point, but it's simply what people were/are willing to pay. And people are holding onto it. To suggest that a boiler room was responsible for such a rise in PPS is very difficult for me, personally, to conceive as plausible. I think Mr. Left is grasping at straws here and it sounds desperate. That's my personal opinion. I'm sorry, Mr. Left, if you have difficulty covering your short position. Life happens. GLTA
    22 Jan, 01:16 AM Reply Like
  • ECapo
    , contributor
    Comments (465) | Send Message
     
    omeshrin....your comments are very worthy with a few exceptions in paragraph one...Mr. Left heavily shorts stocks to make money....he also has been wrong many times also...and his statements not accurate....and I do not think we need people like him and his past criminal history on this site...I also do not know why SA allows people who have had these type of convictions on their site...I think character reveals a lot about a person and their motives...and their actions......and yes I believe criminal action says a lot about a person..and really everything about a person...would you like to see Madoff make comments on SA and also get paid for it....I do not think so...as noted with this link.....
    http://bit.ly/MpCol1
    you were right on with your other comments....
    I also watched the interview on CNBC and I think he acted like a kid who just got caught with his hand in the cookie jar...nervous...sweating ..slurring with his words.......
    sometimes I think many Investors and I stress the word Investors.....get tired of shorts getting in a bind and trying to drive a stock down for no real reason...so they do not loose money on their short bets.......and many of their false statements are repetitive..article after article...as your last sentence stated, "I'm sorry, Mr. Left, if you have difficulty covering your short position.. Life happens." I think that it could not have been said better! Thanks you for taking the time to comment on this....
    22 Jan, 09:41 AM Reply Like
  • omeshrin
    , contributor
    Comments (22) | Send Message
     
    I think you make a fair point ECapo about credibility. I understand what you are saying and I agree with you. Thanks for your response! :o)
    23 Jan, 02:05 AM Reply Like
  • beepaw
    , contributor
    Comments (6) | Send Message
     
    It doesn't take a rocket scientist to know that longs are in the money if the stock goes up and shorts are in the money if the stock goes down and so both plead their cases in overt and covert ways.

     

    An article published by Citron Research 2006 warned investors about ISRG. The stock is up 415% since then, even despite another warning in 2012 (actually it was the exact same article republished as if it was new). QIHU up 364% since it was "exposed"in 2011. LTM up 260% since it was "outed" in 2008. QCOR up 137%. USNA up 76%. Even TSLA is up 21% in just five months after being denounced.

     

    So Left isn't always Right. Just sayin...
    22 Jan, 01:28 AM Reply Like
  • janeborrowman
    , contributor
    Comments (124) | Send Message
     
    Love your post, beepaw.
    22 Jan, 01:57 PM Reply Like
  • elein1
    , contributor
    Comments (4) | Send Message
     
    Just google Citron and ONVO and click on the CNBC Fast Money link where this Left guy is interviewed saying that this Japanese boiler room is inflating the stock. The CNBC host responds by saying they researched that accusation and that this Japanese boiler room has purchased zero shares of the stock and basically just kept the money of the investors who wished to buy it. This Left guy then backtracks and gets flustered. Seriously people, there's something shady about this guy. Listen to the way he speaks and if that's not enough, a simple google search shows that he's been arrested for fraud.
    22 Jan, 01:38 AM Reply Like
  • janeborrowman
    , contributor
    Comments (124) | Send Message
     
    Elein, can you cut and paste the cnbc link here? I've googled ONVO, Citron and Andrew Left, and only get a blurb which doesn't show this Left guy squirming. I'd really like to see the portion of the interview where the CNBC host says they researched Left's accusation and where Left backtracks and gets flustered.

     

    Thanks!
    22 Jan, 02:41 PM Reply Like
  • omeshrin
    , contributor
    Comments (22) | Send Message
     
    http://cnb.cx/1arUrTG__source=yahoo|headlin...

     

    You can see his expression at around 2:02, right after she reads Organovo's response.
    23 Jan, 02:09 AM Reply Like
  • omeshrin
    , contributor
    Comments (22) | Send Message
     
    What Left basically says after Organovo's rebuttal is that he did not intend to call out Organovo on this boiler room issue, in fact, but all he actually intended was to advise people to do their due diligence and if they do that, he states, they will come to the same conclusion as he did...
    In other words, he is saying that reading the bearish articles on organovo is essentially solid DD (and Citron, in fact, links only those articles) and everything else that's out on the company is essentially crap one should ignore.

     

    So, in short (no pun intended), Left made no point whatsoever and provided absolutely no new information.
    23 Jan, 02:15 AM Reply Like
  • janeborrowman
    , contributor
    Comments (124) | Send Message
     
    Thanks, omeshrin. This is the same clip that I found and watched. I'm not sure this guy backtracks or gets flustered - I didn't quite see that. He did smirk at around 2:02, but that's about it, from my point of view. I didn't see anything where he appeared to be "caught with is hand in the cookie jar." Maybe I just don't have the whole clip...and I would like to see it.

     

    Thing is, with his rough appearance on TV and, most importantly, his background with the fraud and being suspended by the NFA on some fairly serious charges, I wouldn't buy a used car from this guy...regardless what he thinks about ONVO. (The same would be true if he were long instead of short.) This guy is carrying some baggage. I'm surprised that CNBC would even give this guy air time. Hmmmm.

     

    This guy Left is in the same camp as Muk - in short, he thinks ONVO is a scam. He calls what ONVO is doing "ridiculous." I'd like to see evidence of that. I seriously would. ONVO may not succeed, but they are not a scam. I think they are trying mightily to do what they think they can do. They have been written about extensively in science publications. They were studied by the engineering dept. at UC-Berkeley. They were featured on "CBS Sunday Morning." (That was really interesting.) They are in collaboration with some of the biggest and best universities and hospitals in the nation - perhaps, the world. They are in collaboration with the NIH, for crying out loud. Yet, Left thinks what ONVO is doing is ridiculous.

     

    I think this kind of reporting is unfair. And, for some strange reason, Seeking Alpha allows this kind of grossly slanted and slanderous reporting to be placed on its site, all the while striking down others who oppose their outlandish statements. I'll bet this post even gets nixed by SA.
    23 Jan, 01:57 PM Reply Like
  • bowater
    , contributor
    Comments (187) | Send Message
     
    this guy does have some punch.
    ONVO will have to prove him wrong by having a viable product.
    22 Jan, 09:07 AM Reply Like
  • rongood
    , contributor
    Comments (11) | Send Message
     
    Pearson makes some good points, however Mr. Left's smoking gun was shown to be unloaded.
    23 Jan, 11:28 AM Reply Like
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