Today I will be adding 45,000 shares of PolarityTE to the Special Situations portfolio at the current price of $0.5441.
This addition is highly speculative but is being added for the following reasons.
First, the COB is Peter Cohen. Click on the following URL for his Wikipedia profile:
Peter A. Cohen
On May 18, 2021, Mr. Cohen purchased 216,000 shares of PTE at a priced of $0.9788 per share, increasing his holdings 60% to 704,452.
Given Mr. Cohen’s business experience, the above trade begs the question . . . why?
You might agree that the answer to that rhetorical question is that Mr. Cohen anticipates higher market values for PTE in the future.
Second, if you’re a Seeking Alpha subscriber, read the 2019-05-23 – PolarityTE - All Or Nothing research report, sub-headed Valuation: Zero or a Thousand. Here’s an excerpt from that report.
“But the more I think about it, the more it’s become clear to me that this is an all-or-nothing play, like a very long-term call. Either SkinTE becomes the new standard of care, or the company runs out of money trying to get there, and someone snatches up some very valuable IP and talent for a song at auction.
I modeled the former at 80% market penetration in the US in each of the indications, with 60% annual bumps in CapEx and OpEx. The DCF math gets the stock to $950 in 5 years under those circumstances. That doesn’t include the incredible international opportunities I outlined.
The other option is zero.”
Here’s a quick summary. You could buy 1,000 shares of PTE today for roughly $550. That’s the risk. On the other hand, if PTE succeeds and the above research report proves to be accurate, the future market value of a $550 investment would be $950,000.
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