Good morning friends:
There have been three on-going threads lately concerning MDIX on this board. The first is that MDIX has moved into the category of prime tender candidate because its marketcap is less then its cash (out) value. The second thread concerns the speculation as to who would be the erstwhile suitor and whether there is a suitor, or why a suitor would exist. The third thread concerns denial and accusation on the part of those who feel that the company is valued properly and MMs, Shorts and speculators are at fault for creating problems for the stock by starting their own rumors.
I think all of us are about to have a "learning experience".
None of you should be surprised, but there is a story circulating this morning, more than a rumor because of the wealth of (supposed) facts, that management of MDIX is going to jump ahead of a supposed suitor/opportunist and tender offer for all shares....yours and mine...
I have heard several prices, and if one of these come to pass, the upcoming deal will not offer the profit you were hoping for. Hey, for lots of us, its still a nice profit.
And if you think beyond the money ..... its the best resolution for the company. Why? well, for one thing, there won't be the concern for the stock price all the time. Management won't have to worry about the company being bought for a ridiculous price and controlled by possible vultures. They can get on with the way of doing business.
But the learning experience comes into play as well:
What got us to this point?
Could it have been stopped? Can it still?
Where is our responsibility as shareholders in this?
What could happen now?
The triggering event that brought this on, is that people -- shareholders, arm-chair analysts, traders etc. couldn't get past valuing the company for its cash value. It is true. This company has sold within several percent of the amount of cash it has had in the bank for the past 11 months. This has occurred despite bold moves by management (killing an approved reverse split, using cash to buy-back Preferred stock, acquiring the Internet company Cymedix). This is not THAT kind of company. It truly is like a biotech. You have heard the term "biotech of the internet" on this board. MDIX really is. Biotechs as companies generally don't make money from earnings in their early stages. Frankly, if biotechs were valued the same way the market values MDIX, there would never be a biotech. We as traders would bid the price down because they had no earnings, nor a daily announcement to salve our curiosity, and every one of them would be taken out by an opportunist putting their cash at risk for at most 60 days.
Biotechs get funds through liasons with drug companies who hope to market the product. Biotechs have many hoops to jump through to get a product to market. The trail for MDIX is similar. Fortunately in this case, MDIX has jumped through most of those hoops and produced a very marketable product. Biotechs are slow movers in stock price as a rule. Then one day, or one week, whamo. Biotechs are often years ahead of their times. So is MDIX.
And, quite frankly, the Lynx product and the Universal Server, etc. is just that. Visionary products ahead of their times. But no one has seemed to understand the value of the company, or even cared. At least not long enough for the thing to get going. So, for the fourth time in less than a year, the stock price has spiked. Only, this time it was time #4 and has caught the eyes of opportunists.
There were so many, brokerages included, that said, "we'll move in when we get news". Well, we've gotten news. Three times, great news in the month of April. But the masses clamor for more. They want news of a future profit stream. The company was prepared to give us a release, a glimpse of the future and then stepped back, concerned that the future would be too far off for most of us -- as if 7 months is a long time. You know something? It doesn't take a lot of brains to move into a company when it is starting to do well. But it takes a real gutsy person to move in when you aren't sure.
The company tried to clear up your confusion. They told you about patents and trademarks. They told you that they had caught somebody big stealing their technology and were suing. The company tried to lessen your risk with information. I did the DD on this company for all of us in this folder. I'll tell you where my price points were based on the company's recent news, its marketing pipeline, its ties to companies like SNTC and the reaction of similar companies (who I might add, have much less news): $.875 in May, $1.25 in June, $1.625 in September and $2.00 in December.
So, too many people were wanting some news to pop the stock and then they could get out. And then others got in. And not a lot cared about the patents or trademarks either. These are royalty makers. They enrich the company long after the core product has lived its usefulness. Not one post dealt with this issue.
Another fault is simply the "instant gratification, gambling" mentality of our society. People want quick profits. Then they go on for another one. I would be willing to bet that people bought this stock for a quick trade who didn't even know or care anything about the company, not really.
What could happen now? Well, shareholders will be offered a tender for their stock. Then we can go on with life. The company? It will be able to grow and focus on its task and become the market leader in the medical information industry. Could it be taken over later? Sure. But management isn't going to do it for a song to just anyone. Management will not allow its company to be stolen free of charge again. We, as shareholders, allowed this to happen. Allowed it to happen and did nothing. Didn't care. In fact we pushed management to do something to please us by pushing the stock lower -- to the point that any arm-chair trader could have taken the company over.
Both companies in this entity on their own have been led by some very visionary people. Put them together and it will be exciting to watch. What happens if some shareholders decide not to sell? Consider that a majority of the shares are held by management and they are making sure that what happened these past two weeks never, never happens again. This company is going private. When their votes are cast, that's it.
As I said, its only a rumor at this point. But the next few days should bear out the reality. Yeros and Berman are still going to see the suspected corporate tender next week. That company is a preditor. This information comes from the much maligned Mike Moran -- who was right once again. I suspect now you'll blame the messenger after you killed him.
This post is harsh...last night I read through every post that has been made on this company, noting where some of you got in or out. There is some emotional loyalty on the board here, however, its not enough. I suspect that any spike in the stock price would simply lead to more selling....its a vicious circle. Whatever, we are all going to be cashed out shortly, I'm told. I would have liked more than the figure I'm hearing, I will not share that figure only because its possible it could change. But a lot of you who posted where you got in will still have a profit.
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As I said, I think we will have something definitive in the next few days.
Mary |
