NEW YORK -(Dow Jones)- Chromatics Color Sciences International Inc.'s stock was pounded again Tuesday, following a noted short-seller's "strong sell" and "short-sell" recommendations.
The shares (CCSI) lost $2.313 Tuesday, or 26%, to close at $6.50 after earlier dipping into record-low territory at $4.50. The prior 52-week low was set June 11, 1997, at $4.172. More than 4.7 million shares changed hands Tuesday, compared with average daily volume of 350,500. On Monday, the stock lost 18%.
Chromatics provides scientific color measurement and classification of human skin and some consumer products. The decline in the company's stock price follows short-seller Asensio & Co.'s report, as well as a Sunday New York Times article that said a fund with a 10% position in the company plans to "broaden" its holdings.
That small-cap fund is Dreyfus Corp.'s "Aggressive Growth," whose No. 1 holding, Chromatics, accounted for almost 13% of its assets, the Times reported. The fund's manager couldn't be immediately reached for comment.
Short-seller Arsenio & Co., a New York-based firm, whose prior negative reports have targeted several companies, claims that CCSI's product, Colormate III, a color measurement system to detect jaundice in infants, has no sales or licensing potential. Colormate III has received FDA approval for noninvasive detection and monitoring of bilirubin infant jaundice.
In its statement, Arsenio also charged that it had "discovered a pattern of trading that deceived investors and created huge profits for insiders and their associates."
However, Charles Biderman, president of Market Trim Tabs, a specialized market research firm, remains bullish on the stock. He recently issued a "renewed buy," citing the results of a study headed by Dr. Ian Holzman, professor of pediatrics and chief of newborn medicine at Mt. Sinai Medical Center in New York.
Holzman told Dow Jones that the study, of 2,441 newborns, illustrated that the Colormate device provided an accurate and linear estimate of serum bilirubin. He noted that the FDA said the device's results are
"substantially equivalent" to a serum blood test for bilirubin. Holzman added that he believes that either the device or an equivalent will eventually occupy "every hospital, birthing facility and pediatrician office."
Officials at Chromatics, which is based in New York, didn't immediately return calls seeking comment. Late Monday, they said an extremely large short position in the stock could have strained the
share price. |
