August 21, 2020 8:05am

Sector sentiment “wherefore art thou”?

Pre-open indications: 2 BUYs and 2 SELLs

<The Biostage (BSTG) Chronicles – more questions of a $4.00 Private Placement (PP) funding of 75, 000 unregistered shares <Read more>

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Dow futures are DOWN -0.41% (-113 points), S&P futures are DOWN -0.44% (-15 points) and NASDAQ futures are DOWN-0.29% (-33 points)

 

U.S. stock futures are down anticipating a Friday negative open to end the week;

European stocks traded slightly higher shrugging off disappointing EU economic data while geopolitical tensions remain in focus; yet, the pan-European Stoxx 600 climbed 0.3% in early trade;

Asia Pacific stocks rose following the release of mixed U.S. economic data as the MSCI Asia ex-Japan index gained 0.9%?

 

Data Docket: U.S. existing home sales is due for release at 10 a.m. ET.

 

Henry’omics:

TGIF, that's all I can say or discern from this market in regards to our universe or sector

 

Thursday night’s post title – “sector slips again post earnings’ blues, we need news and catalysts

  • The NASDAQ closed UP +118.49 points (+1.06%);
  • The IBB closed down -0.30% and XBI also closed down -0.02%
  • Sector volume was LOW with 4 of the 12-upside having higher than the 3-month average volume and the 5 of 22-downside having higher than the 3-month average volume;
  • The CBOE Volatility Index (VVIX: INDEX) was up +0.18 points or +0.80% at 22.72;
  • Thursday’s percentage (%) of the 12-upside were +0.02% (RARE) to +13.68% (BSTG) while the 22-downside ranges from -0.36% (AGTC) to -8.82% (CRSP); 

Last five (5) sessions:

  • Thursday closed negative with 12 advancers, 22 decline and 1 flat
  • Wednesday closed negative with 16 advancers, 17 declines and 2 flats
  • Tuesday closed negative with 13 advancers, 20 declines and 2 flats
  • Monday (8/17) closed positive with 29 advancers, 4 declines and 2 flats
  • Last Friday closed negative with 10 advancers, 23 decline and 2 flats

Q3 so far:

  • August, 6 positive closes and 8 negative closes
  • July -11 positive and 11 negative closes with 1 holiday

 

Companies in my headlights – It’s your decision; I provide an idea and context:

Maintaining Sell:

Biostage (BSTG) closed up +$0.16 to $1.33 after Wednesday’s -$0.18 (was down to $1.00, Wednesday noon) after Tuesday’s -$0.81 and last Monday’s -$0.04 (was as low as -$0.20) post the previous Friday’s -$0.45.  Keep writing those checks to “PUMP” the share price – it’s costing you more and the less goes to the operations of the company.

Question 4: What JUSTIFIES BSTG establishing a $0.30 share price increase as BSTG sells 75,000 Private Placement (PP)unregistered shares priced at $4.00; barely any employees left, no clinical trial initiation after an FDA IND approval and a burn rate that exceeds the cash position with a huge debt and quarterly liability overhang. The valuation model explained and defined – WHAT? My foregone reason, to keep past PP shareholders THINKING an increase in value.

Question 5: What about the terminal death suit that exists? In the documents for the new sale of securities, it states:

  • Litigation. “Except as disclosed in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Except as disclosed in the SEC Reports, neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.”
  • Is “Except” a word to disavow the actuality of the pending suit …?

The term – “going concern”, it’s even more UGLY when all this could have been AVOIDED! Also, remember the strategic plan for “forward motion” that was TOTALLY disregarded.

There still exist the millions of private placement unregistered shares (priced at $3.20, $3.60, $3.70 and now $4.00) existing FAR beyond the registered outstanding and float shares.

 

Pluristem (PSTI) closed down -$0.25 to $10.44 after Wednesday’s +$1.05 and Tuesday’s -$0.04 and has a negative -$0.34 or -3.26% pre-market indication;

 

SELL to BUY:

CRISPR Therapeutics (CRSP) closed down -$8.88 to $91.76 after Wednesday’s +$5.72 to $100.64 and has a positive +$1.04 or +1.13% pre-market indication;

Mesoblast (MESO) closed down -$0.07 to $17.1 after Wednesday’s -$1.14 to $17.78 after Tuesday’s -0.89, Monday’s +$1.93 and last Friday’s +$6.07 and has a positive -$0.29 or +1.64% pre-market indication;

 

 

The BOTTOM LINE: Welcome to my world of defining the “grey’ in the universe of Private Placement funding!

The philosopher Friedrich Nietzsche once observed that "any explanation is better than none." I disagree. Sometimes, in the investment world, no explanation is really necessary — or relevant.

We crave explanations because they give us an illusion of control - It’s OK as long as BSTG’s president get away with it …

 

Opinions expressed are those of the author and are subject to change, and not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors.  All investments are subject to risks. Investors should consider investment objectives.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.