My take on the price drop is that a whole lot of people who have gotten soaked on LDAKA were hanging on for a long time to dump it as soon as the price went up significantly. Combine the previously-burned investors who wanted to get out on the plus side, and the Bud Greenspan-types who were in on a short term play on test results, and you have a lot of selling pressure once the price rises.
There's also scant analyst coverage, which suggests that most of the institutional investors haven't gotten involved yet. The reason I am optimistic for the rest of this year is that I think the Phase III test is big enough news that a bona fide investment house may actually start paying attention. If that happens, the future prospects of Lidakol plus the ridiculously low stock price would seem likely to equal a "buy" recommendation. And the fact is, this stock has lately moved a whole lot more on investment news than on fundamental news. The biggest percentage gain of the year, for example, was not the Phase III announcement, but Bud Greenspan's announcement in Jan./Feb. that he was recommending the stock! The stock also moved more when Bud pumped up the stock earlier this summer, than when the mouse technology news came out.
In my opinion, this stock will rebound very smartly once a big-time analyst gets involved. With the renewed focus on small-caps due to pressure on the blue chips, with the several pieces of news coming out soon (NDA, other Phase IIIs), and with the fact that only about 2 dozen new drugs are approved every year, I can't believe somebody isn't going to finally notice this company.
Peace and chicken grease. |
