Revisiting Second Sight Medical Products: The EV Is Negative And Being Short No Longer Looks Appealing

Summary

  • Second Sight has a negative enterprise value at the moment as it has about $69 million in cash.
  • In my view, short-selling the shares of a company with a negative enterprise value could be dangerous and bears could be better off closing their positions.
  • However, I’m not bullish either as Second Sight is merging with another early-stage biotech company and the market valuation of the combined entity stands at close to $250 million.
  • Most of the cash will likely be invested in the development of new products and I think it’s too early to tell whether any of them have blockbuster potential.

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Introduction

In March 2021, I wrote a bearish article on SA about retinal prosthesis systems developer Second Sight Medical Products (EYES) in which I said that I thought that the business of the company wasn’t worth much

Argus II system

Second Sight Medical Products

Orion system

Second Sight Medical Products

Second Sight Medical Products share price

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I have been investing in stocks for 13 years now, most of the time in my native Bulgaria. I have a bachelor's degree in Finance and a Master's degree in International Business and I like reading Pratchett and Michael Lewis. Regarding the opportunities that I cover, please take into account that I'm an admirer of legendary fund manager Peter Lynch so I tend to follow a lot of his investment philosophy.

- Disclosure: I am not a financial adviser. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

Additional disclosure: I am not a financial adviser. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading.

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