Geoffery -- >I do not think the price is where it is because of high frequency trading or short selling. The price reflects the market opinion of the value of the stock.<
When, according to various public estimates, “HFT” is said to have reached levels of something like 90% of all trading, it hardly makes sense to deny HFT as a strong influence. And, post-analysis of data tapes shows even far larger increases in “HFQ” (high-frequency quoting) than for HFT. This bid/quote/trade activity makes a mockery of the notion of national best bids and quotes, as they are frequently cancelled before the bids or quotes leave the exchange.
Trading activity is now dominated by algorithmic “robots” (specialized computers located on the floors of the exchanges – displacing humans). These “machines” are so fast they utterly defy the concept of fair trading by way of widespread public knowledge of best bids/offers—because of the speed of light limitations on information travel. Quotes and bids can be, and are made and cancelled at furious rates, before the bid or quote or trade information leaves the “premises” (actually, distances of one to a few thousand “feet”, not the 100s to 1000s of “miles” between exchanges, travel back-and-forth of which is necessary for arriving at “best” bids/quotes). This is problem #1 for stock trading, but it is still not understood by most investors. Essentially, the long-known tricks of “spoofing” and “pinging” have reached enormous levels – and are hidden from immediate view.
Does the above affect a low trading volume, low price stock like BSDM? A look at a list of individual trades indicates YES. Lately, for example, about two thirds of the BSDM trades were for 100 share lots! This indicates a high level of pinging. The pings can detect a large order from the time it takes to fill these tiny orders! – and those placing the pings can react accordingly -- and exchange--floor located robots can/do react before the trading information “leaves the premises! [BTW, I call these specialized computers “algobots”, for short. That name emphasizes that the computers carry out trades, as well as place bids/quotes. They are developments that have enormously energized short-term stock manipulating.]
Spoofing (placing-then-instantly cancelling orders) to create false intent is harder to detect, but can be shown by analyzing data –storage tapes, which can be bought. For some extremely interesting charts illustrating this activity, see those generated and publicized by Eric Hunsader. He truly understands and has revealed what is going on – the manipulations are undeniable!! Here is a recent expose’ by him, one of many:
http://www.nanex.net/aqck2/4661.html
“Nanex ~ 15-Jul-2014 ~ Perfect Pilfering”
“A detailed data-centric exposé on how the market is rigged”
Don’t be “put-off” by the “jazzy” title – Hunsader is utterly outstanding in his activities – search for his name to retrieve a large number of key contributions.
Stock markets have always been “rigged”, but the “game” has now reached fantastic levels of manipulation, by using high-speed computers located at the exchanges. A result is that stock prices for emerging companies, in particular, can be ridiculously misleading – so, my posture is to only invest for the long-term. And, truly fundamental things – about the company, its products, and the markets for the products – are essential. On that basis only does BSD Medical look good. (And, algobots have exceedingly poor reading abilities! – so they are useless for long-term analysis!)
>Different types of companies go into distress in various ways, but all have one thing in common: they run out of cash and the ability to raise it. High tech companies never run out of ideas or hopes; they run out of funding because the market senses that in consideration of the time to fruition of an idea, the risk of bad developments, the burn rate, the risk of competition, etc. the prospects are dim.<
Such problems are truly difficult for start-up or emerging medical-product companies. The issue is particularly severe for BSD Medical – because, broad-brush, they are pursuing a new cancer therapy regime – not, say, just another pill or surgery procedure). The gains can be very large -- and the wait very scary. BSDM, for example, has soared many-fold in a single day! The drops have been much less dynamic -- but, so far, have been just as deep. Anything like precise timing is, I believe essentially impossible.
>The guys running BSDM are not business guys. They have taken this company to a point where if they make a partnership with a bigger company, they will do so from a position of weakness, and if they try to continue for a few years as a standalone company they will wither away.<
I think those are incorrect conclusions, but it takes substantial discussion to reveal the company's prospects. Here is a hint, however: they have garnered one large, “worldwide” strategic partner -- Terumo. And, other large companies are actually seeking BSD Medical out! (Their last CC is still available at their website – definitely worth listening to.)
>I am hoping they have the good sense to make a deal now, before they get into a weaker position.<
Why do you think their position will become weaker? Their sales growth from Terumo alone, while varying a lot from Q-to-Q, indicates profitability is “nigh”. And, their R&D costs have gone up some – portending a new product is coming. For a number of reasons, I think this product will be focused on lung cancer ablations – a large market. Microwave ablation (MWA) of lung tumors is much more effective and much safer than the (presently) leading radio-frequency ablation (RFA) – and the CEO has been steadily mentioning this fact -- and they have added Dr. Damian Dupuy to their BOD (he is an outstanding lung-cancer researcher and guru). But, this has/will-have little effect on short-term pricing for BSDM – because the algobots cannot really read – nor actually think.
BTW, RFA has for quite a while been approved by the FDA for liver tumors, and others – such as lung tumors. This is why the MTX-180 ablation product was promptly given FDA approval for the same tumors – and it has actually been used for lung tumors. So, if BSDM introduces a major new MWA machine tailored for lung tumors, it will likely be immediately FDA approved. |
