G-Man:
Now that I have a few more minutes, let me ask you a question or two concerning LIPO.
Does the following concern you or present an investment opportunity?:
1. LIPO loses 21.7M on sales of 65.6M.
2. LIPO's primary product for which it has invested tons of money failed tests and was not approved by the FDA. LIPO has no product of consequence in the hopper.
3. LIPO has 37.4M shares outstanding giving the company at its current stock price an on paper value of approximately $224,400,000 or 4 times its revenues. At the stock's 52 week high, the value of the company on paper was $1,122,000,000.....not bad for a company that loses $1.00 for every $3.00 of revenue. And a paper value of over 1 billion for a company with 65 million annual sales???
Take a look at the salaries, restricted stock options, etc. of the executives of the company. Incentive?
The point is that somewhere along the line, reality has to set in. Even if LIPO's Ventus worked, would the company be worth 1.1 Billion?
That is the downside of investing in biotech companies. Everybody wants to make the big hit on that 1 in a thousand that makes it. That's fine if you know it going in but the mistake most investors make is that the apply the investment parameters commonly used for investing in quality companies to the biotechs and that just doesn't work.
There are many great quality biotech/drug companies to invest in. The good ones will return 25-30% average annually over time. But there are those that will return 150% in a week or two, only to give it all back once some sense settles into the picture.
As I said in my earlier post, I'm not always right and just giving you my opinion...not to be taken as scare tactics please. I hope your techniques work well for you....maybe we can all become millionaires when this market bounces back.
Best to you.
Chip |
