KLH and Thread, Looking for comments on strategy.
It struck me the other day that GZTR's stock price was touching $2 per share. Not that it was a surprise, because I have been watching the price erode over time. I guess it wasn't registering with me that the price is close to what I believe is its all time low and sitting there moribund. In fact the stock has been a terrible performer no matter where one bought it.
While staring at the low stock price, I realized that this stock is not going to stay at this level forever. You might say it was a "wake-up call". There are three possible scenarios for the stock price, it will go up, down or remain unchanged.
Downside action is limited as the current price is virtually at rock bottom. This company has an FDA approved product that has yet to develop into its full potential, and besides, GENZ, the parent, is not going to let its sub fail. Especially since they continue to plan additional issuances of tracking stocks. Of course, there could be unforeseen negative consequences or competition that would make the company's product obsolete or too expensive.
In order for the stock price to remain unchanged for a lengthy period, would mean that the status quo continues. That is, no new developments for GZTR, biotech stocks languish, growth in product sales is mediocre, and share dilution continues.
Upside potential is promising. Sales are growing. Product improvements are being developed. More surgeons are being trained. Insurance coverage increases. Insiders are buying the stock (Teemer?). Backing by GENZ.
Of the three scenarios, I believed that the upside potential is too great of an opportunity to pass up. I established a trading position of 10,000 shares purchased at 2 1/16. In effect, every 1/16 tick in price is worth more than 3% or a $625 gain or loss on my investment. One of the factors influencing this decision was watching a similar biotech ATIS jump from $3 to $6 within a month's time before settling back to $4+ on no significant news.
How many of you shareholders have bought in to GZTR at higher prices and averaged down when the price continued to drop? If you haven't sold the stock, why do you continue to hold it? Is it because you believe the stock will rebound enough for you to recoup losses? If so, at what point do sell? Do you expect it to go to $3, how about $4?
I am not expecting GZTR's stock price to reach its 52 week high of $7 1/2 this year, although it would be nice. I do expect it to trade at least above $3, maybe $4 sometime this year. At those lowered expectations in price, 10,000 shares as a trading position would generate fabulous returns.
All comments are appreciated.
Regards |
