The volume showed clearly that daytraders moved in after the press release and pushed the price up to 6, where they met heavy resistance from the institutuions that are still trying to unload all the PLMD they have. At the end of the day, these traders, wanting to go home flat, sold their positions and the price collapsed.
What we can infer from this is that virtually nobody wants to hold shares of PLMD for the long-term. The prospects for PLMD, to most people, look bleak.
So, let's consider that maybe these people have a good argument. Ask yourselves, is the future of retailing going to look like PLMD's telephone, direct-mail, and heavy-TV-advertising approach?
IMO the numbers that Polymed and its bulls trot out to show its financial health simply can't be trusted to hold up in the future. We must remember that Polymed serves a small minority of Americans and that they face increasing competition to boot. If they ever get into a pricing war, Polymedica will probably lose--they spend too much to get a buck in revenue.
I found it particularly ridiculous that Lee attempted to reassure his shareholders by pointing out that two analysts covering the company have "maintained their buy recommendations." Sure, as if analysts NEVER have conflicting interests. Anyone who doesn't always keep in mind the practice of analysts to come out with or maintain buys for the purpose of selling their clients' shares into strength is being naive. And everyone on this board ought to know that Lee's credibility is suspect going back to last spring.
One thing this message board doesn't discuss much (and should) is whether or not the PLMD business model can survive (much less flourish) in a 21st century economy. Personally, I think in ten years it is more likely that people will buy drugs and targeted medical supplies from Amazon.com rather than Polymedica.
So, should everyone bail out tomorrow at the open? Maybe not; the press release will be used by all sorts of brokers overnight to get people to buy who worked during the day and had no chance to act on the release as it happened. And now that traders have gotten a look at some up and down price movement, there might be high volume again tomorrow. But I would be careful and I would only buy for a trade, not to hold. Good luck. |
