The Prophecy of Mr. P$nk...Oh Lord He is wise.
By Pat Maio
Of DOW JONES NEWSWIRES
LOS ANGELES (Dow Jones)--Shares of Med-Design Corp. (MEDC) fell more than 7%
Monday on concerns that short-traders are pushing the price down, according to
the company's chief financial officer and an analyst.
Larry Ellis, Med-Design CFO, said in a phone interview that there was no
pending news to cause the stock to be down Monday, or to trade at such a high
volume. Shares traded at more than twice the daily volume.
However, Ellis and at least one analyst believe that short-traders are
involved with the bearish price movement, with Ellis pointing to a single
trader whom he declined to identify.
"We have a notion who it is, and we know he is a short seller, who does this
kind of thing for a living. There's nothing we can do about it," Ellis said.
"The company has been able to achieve its strategic plan for the year, and next
year we plan to do better, and I don't see a reason why this kind of short
interest is warranted for Med-Design."
William Gibson, analyst with Banc of America Securities in San Francisco,
said the company is plagued by short-sellers.
"A lot of people are shorting the stock. They got into it when it was in the
40s," Gibson said.
Med-Design shares were down $1.16, or 7.2%, to $14.89, on volume of 855,200,
compared with average daily volume of 408,400. The stock hit a 52-week high of
$42.39 on July 26, 2001.
Holders with a short interest in Med-Design make up at least 3.39 million
shares, or 31.1%, of the company's total outstanding shares of 10.9 million, as
of early October.
Ellis said Med-Design has been particularly bothered by a single short-trader
who has been active on chat board discussions about his company on the
Internet.
His alias is "Mr_Pink_esq," Ellis said.
In one message written Nov. 18, Mr. Pink boasts that he has "extracted" $3
million from the "loser longs."
"We do know who he is, and he is in our estimation a short-seller, who has
done this to a number of companies in the past," Ellis said.
"The best way to get rid of a short is meet your strategic plan and your
numbers, and get them running," he added. Med-Design, of Ventura, Calif., is
transitioning from a development stage business into a money-making one with
several products.
Med-Design's biggest rival in this niche is Retractable Technologies Inc.
(RVP), which is trading up 11 cents, or 1.9%, at $5.96 a share late Monday.
Med-Design designs and develops safety-designed safety-engineered needle
products that reduce the incidence of accidental needle punctures.
Med-Design already has two licensing agreements under which it has granted
two medical device makers the rights to manufacture its needle and syringe
technologies, including Becton, Dickinson & Co. (BDX) and MedAmicus Inc. (MEDM)
Med-Design collects royalties on these licensing agreements. Early this year,
Med-Design announced a manufacturing agreement with Abbott Laboratories (ABT).
Other products, including a syringe and blood collection device, are scheduled
to be introduced by the company this quarter and in the first quarter of 2002.
For its third quarter ended Sept. 30, 2001, Med-Design reported net income of
$226,300, or 2 cents per share, on $2 million, versus a net loss of $1.64
million, or 16 cents, and no revenue in the same year-earlier period.
-By Pat Maio, Dow Jones Newswires; 323-658-3776; patrick.maio@dowjones.com |
