DISCLAIMER: I am long shares of SBOTF and may add to the position at any time.
”Even blind squirrels find an acorn every now and then”
OK, I know .. there is already plenty of discussion re Stellar Biotechnologies (SBOTF) on the site. Since Travis posted the tease from Nick Hodge in early July, the stock is up a hair over 100% (my Special Situation account sends many thanks for that one!). The reason I’m opening this thread is because the majority of comments from those of us interested or already invested in SBOTF are being posted under another wonderful – yet mostly unrelated – thread by Doc Gumshoe that talks about Alzheimers and possible causes/treatments/cures. Great stuff, but not fully germane to the topic of SBOTF. So, tho seperate the two discussions, I thought I’d try this so we can focus on each of the topics independantly.
That said, here’s some commentary about SBOTF that I have gleaned from the original tease, tracking the price action since July, reading member comments on this site, and studying anything and everything I can find about the Company and it’s product, Giant Keyhole Limpet Hemogobulin, a/k/a KLH.
First, a little peeve I’ve developed; the actual name of this animal that is the central focus of the business. I’ve noticed a trend of sorts by readers to refer to the Limpet as a ”snail”, ”escargot”, or something along those lines. While some may be using this as a light-hearted way of referring to the animal, it is not any of those. Please, use the proper name – as silly as it might sound. New readers could easily dismiss the entire idea and be misled otherwise. No disrespect meant to any who have done this, but I think it’s important we stay on track.
Now, some factoids for you.
If you haven’t done your due dilligence yet, the place to start is right here on this page. In the upper right you’ll see a box that says ”Teaser Tracking.” Click on that. The page that comes up is a list of the teases which Travis has posted over the past many months. Second from the top is the one re SBOTF. Some good tidbits of info right there. But what you want to do is look all the way over to the right and click on the link to the original tease posting. Open that and you’ll get the full story that Travis wrote when he first uncovered this tease (produced by Nick Hodge) and is a solid foundation of info about the company. Read it – two or three times to get an understanding of what SBOTF is all about.
Next, if you can find it, try and get a post that has the original video that Hodge did to tease the company with. In it, he (Hodge) interviews a couple of the company’s top executives and takes the cameras outside the room totalk with another employee about the ”farming” process that SBOTF has spent years and millions developing and patenting. You’ll get a pretty good visual inspection of the plant itself, the ”grow tanks”, and the Limpet. Good stuff. By the end you’ll have a fair overview of the company and what it does. FYI, the video tease runs about 40 minutes. It’s the first 25 minutes or so that will interest you. The remainder is what all teases consist of, overblown and repetitive pleas to get you to subscribe to the newsletter service that the promoter has to offer. Save yourself time and money by skipping that stuff.
A few takeaways from the video and additional research:
SBOTF has been around since the late 1990’s, working on how to extract the blood from the Limpet without killing them (they have done that and gotten patents on the process) and how to raise them in captivity in order to ensure a continuious supply of the animals to work with. This ”farming” process has, for the most part, been perfected and SBOTF can now raise them from fertilization of sperm and egg to maturity. They have a lifespan of some 30 years, and coupled with the patent-protected process they developed for extracting the blood without killing the Limpet, the company can now say with assurance that they can provide the Big Pharma with all the KLH they need to conduct clinical trials and produce the drugs they develop once FDA approval is granted. And – this is a big ”and” – they are the ONLY company in existence that can do this at the present time. The many patents they hold may ensure that to be the case for years to come.
Did I mention that KLH cannot be synthesized? So far nobody has been able to do that, so the supply of KLH from SBOTF seems to remain the only game in town.
Stellar Bio has yet to turn a profit. Sales and not much to write home about. That is mainly due to the small supply available and that SBOTF has focused on R&D in the past moreso than actual KLH production. That’s my best guess – I can’t verify that but seems to be the case. It is changing, however. The R&D is still in full swing, but the ability to produce and sell KLH is starting to ramp up as witnessed by increasing sales volume. It’ll take time but those increasing sales are coming.
In the wild (ocean floor), the Giant Keyhole Limpet has never been found ANYWHERE in the world other than in the small colony (estimated to be about 100,000 animals) which is just offshore from the Stellar Bio plant in Ventura County, CA. The enviromental community has been getting more and more concerned about the harvesting of the Limpets from this colony since there apparently aren’t any more around. Whisper talk about possible extinction have begun to surface, although no official governmental action regarding a ”protected specise” has yet been issued. This is why the farming of the animals has been crucial and why Stellar has such a leg up on any possible competition. If the Tree Huggers get hold of that idea, the ability to harvest the colony could – and probably would – be severely impacted.
Recent price and volume action has been fast and furious. As more and more people are becoming aware of the company by means of Hodges’ tease and thing such as this discussion, volume has had days that were near three times the average six months ago (175K shares average vs. some days now running around 500K). And most of this is upside volume indicating increasing demand for shares of a small float. This of course leads to highr prices as we are witnessing as I write.
For now, the gravy train is tearing down the track. The question is, when will demand for shares be curtailed as investor thirst for a bite of Limpet pie become satisfied? When will Nick Hodge back off this promotion, letting the press subside and therefore lessening investor awareness (the stock is not covered by any analyst, anywhere, that I can find, nor is it held by any mutual fund or investment management company). If and when this interest backs off, what effect will that have on the stock price? Trees don’t grow to the sky … or do they?
I can’t answer those questions. Just like you, I can only hold ’um and not fold ’um – yet. That day may come, and that is why I suggest anyone long the stock keep a DAILY eye on it. I’m making no prediction whatsoever about where the price will go over the next several weeks or months. In the interest of full disclosure, I have already taken some money off the table just to partially protect the quick profits I made since purchase. I sold about 30% of my initial position when that part became valued around 50% of my original investment. What remains is valued today right at the same $ amount I first put in. The amouunt I pulled out gives me full protection of some 50% of my original investment. Would I be better off today if I hadn’t done that? Yes. I would, because the price continues to rise. Will I be better of for having made thaat sale if the price stumbles and falls in the near future? Again, yes, I will – if the price falls. Some wise man once said ”you can’t go broke if you take profits” and I believe in that. Me, I don’t care for the idea of going broke, so I’m perfectly happy with this concept. No regrets about putting actual money in the bank, so to speak.
Comments? Concerns? Insights? Let the fun began!
Sincerely,
Your Resident Blind Squirrel
Jim Skelton
This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.
Correction to my comment:
In the original post I referred to KLH as “Keyhole Limpet Hemogobulin.” That is incorrect. The correct name of KLH is “Keyhole Limpet Hemocyanin.” Apologies for the error. I beg forgiveness because I was writing shortly after awakening this AM at 3:30 – a poor hour to began any form of journalistic endeavour. I also have noted a few typos, mainly due to inattention and lack of a spell check device. I’ll strive to do better going forward. And maybe not attempt writing at such an ungodly hour.
Also note: It’s now 10:25 AM and SBOTF has not opened. No trades posted. This is unusual, even for quotes that are delayed by 15 minutes. Normally, by this time, some trades have been executed and the stock is up and running. Why the delay, I wonderf? Order imbalance? If so, in which direction? I sit here refreshing the quote screens every few minutes with great anticipation. Might we see a gap opening to the upside? Or has interest subsided, reality set in, and we’re about to see a rather large pullback on profit-taking? Ah, the world of high-risk speculation. Sure can keep a fellas heart pounding.
Trading halt, requested by the company as of the market close yesterday. That means some kind of news is forthcoming, no idea what or when but it’s rare for it to take more than a few hours. If you’re interested in the company, you’ll find much more news following their home listing (KLH in Canada) than the US OTCQX listing (SBOTF). Announcement of trading halt from yesterday afternoon is here: http://web.tmxmoney.com/article.php?newsid=62175315&qm_symbol=KLH
Hi Jim, love your posts! I’ve been in stellar since it began and its a pleasure to read some intelligent analysis without an attitude. Since you were an analyst, i’d love for you to check out a company thats just starting to get some traction, that also has ‘game changing’ medical technology, and is still very cheap. I’m in it pretty heavily and would appreciate your analysis of it if you have some time, it might also put a new investment on your horizon. The company is Aethlon Medical (aemd). They’re making a device called the hemopurifier, that they can fine tune to remove various items from the blood, such as exosome’s, viruses such as HIV and Hep C. They’re getting money from Darpa for Sepsis, patents in Europe to remove viruses from the blood. Seem to be working with Battelle in the Sepsis battle.
Their website is:
http://www.aethlonmedical.com/
Any comments greatly appreciated.
Thanks
Robert
Did you look at their profile on Yahoo? Humidifiers…small company 10 employees, Mkt.Cap 33M, low volume
HOLD THE PRESSES!!!!!
News … IIROC Trading halt on SBOTF put in place at 4:14 PM yesterday. Cannot find story or explanation. More when available. Hold on to your seats, folks .. this could be good .. or tragic.
UPDATE: Trading halt put into effect on request of company: pending news announcement. No bid, no ask currently posted. OK, one concern settled, that this halt not coming at request of some regulatory agency. That would only mean bad news. Now, is the announcement going to be good news or not so much? Cliffhanger time. Got your body armour on? I had plans to go out for awhile this morning. Plans cxld! Sitting here waiting .. and hoping .. and anticipating … What’ the saying? “Expect the worst, hope for the best, you usually get somethinng in between.” Stay tuned …
Sorry, Travis .. didn’t see your post here before adding to my own comment about the halt. Thanks for the link to the Canadian exchange – good to know and follow. I ought have known you were on top of this. Thanks again ..
It’s 11:25 AM. Still waiting on news release that I figure will be pretty big one way or another. A company does not request a halt in trading otherwise. But I have one final thought to share, a personal story you may find interesting.
In 1973 my then-wife and I were visiting her Dad at Quantico Marine Corps base in VA. He was posted there as Chief of Chaplains for the Marines. One evening we went out to dinner to a Chinese Restaurant and, when the meal was finished, I cracked open my fortune cookie to read the prophecy paper. It said “A man is never happier than when in red-hot pursuit of a dollar with a reasonable chance of overtaking it.”
I put that in my wallet and carried it for years. One day after I began work with Merrill Lynch I took it out and thumbtacked it to my corkboard. It remained there for maybe another 15 years, and I read it daily. It got burned into my brain. And now, 40 years later, the truth of it sounds yet again in my noggin. Those of us in SBOTF are indeed in “red-hot pursuit” at the moment and seem to have a “reasonable chance” of overtaking it. And yes, I’m happy. Whether or not I should be is TBD soon.
Now, I’m going to fade out of this and just wait, silently. If I can only keep my fingers off this dang keyboard ..
Jim–from Wikipedia: Fissurellidae, common name the keyhole limpets and slit limpets, is a taxonomic family of limpet-like sea snails, marine gastropod molluscs in the clade Vetigastropoda.[1][2].
Apparently keyhole limpets aren’t true limpits but are indeed “limpet-like sea snails.”
Go escargot go!
Of course, no matter what type of mollusk we have, the most important factors for an investor are the value of the material harvested to the biomedical community, the patents the company develops regarding their processes, the scarcity of the keyhole limpet and its sustainability.
Like you, I’ve done a lot of reading–mainly focused on the factors I just mentioned. I agree that this product has tremendous upside potential and the company seems to be well run and managed. KLH appears to have great potential for vaccines and other medical uses to treat diverse medical issues. I don’t think it’s snake oil, but it is a rather risky bet at this point given no true revenues. Let’s hope that you and I are true blind pigs who will not get barbecued soon in the market.
I have not lost any sleep over my keyhole pet investment, and do not feel compelled to sit by the computer all day. Last week when some of my other positions were down a little, Stellar was showing a profit, remember I bought @ .63 and as of today I am up 128.80, I have not taken any profit and still plan on holding. I spent hours researching the company , and the science behind KLH and bought prior to the name change. I get direct updates from Stellar, as I signed up for them.
I NEVER invest money I cannot stand to loose.
Regards
Deborah
I’m long on this one. My wife is a Biochem PHD student at UMC MS working on drug transport systems. It sounds like this company may be right up her alley of study and interest. I hope she will have that interview with these folks. I’ve done my reading on SBOTF like the rest of you and like what I see. The halt is disconcerting, especially if a buyout is pending, hopefully not. Along with the rest of you I’ve got one eye stuck to news feed and ticker and the other doing my regular work.
Other: LQMT, PLUG, OESX, F, Dell
First, I’m not sure if a reply to a month old post will show up or not. Second , woo hoo we’re at $2!! And it hit this level BEFORE the Fed. announced its news. Third , this may be breaking protocol (and if so I’m sure I’ll hear about it)
Roger, can you direct me to a discussion page on PLUG? My curiosity has been piqued. Also, hope you don’t think I’m full of myself- really would like to make an investor visit at some point.
I would not think that your ‘ping’ to me is off protocol as long as the discussion of other stock does not overtake this thread. I would hope that the folks here do mention other stocks that they find ‘viable’. Find PLUG POWER on Seeking Alpha.
No, not full of yourself – just excited like the rest of us. If interest is shown for several to visit all the better (and more likely that we will get the tour rather than just one person). I will wait for all to go at once if the interest is shown. I think it would show a great deal of support to the board and to those other (institutional) investors that are waiting in the wings ready to pounce and hopefully push our stock value through the roof. NASDAQ, Splits – oh how my heart is a flutter 🙂
Well, keep a defibrillator on hand just in case!!
2:00 PM – the wait continues.
While doing so, a note to David and Deborah:
David, thanks for setting me straight on the difference between Limpets and snails – or perhaps that there is no difference. What I was concerned about was that a few folks – many on other forums like Seeking Alpha – wee starting to play fast and loose with the description of the primary player here. And some others were getting the wrong idea about what we’re actually dealing with. That can be harmful in gaining an understanding of what is going on. To get things on track I popped off as I did – and appreciate you being dilligent enough to continue that thought to a solid conclusion.
Now, Deborah – hello again! I’m glad you haven’t lost sleep here and don’t invest money you can’t afford to lose. Smart lady, you are. But if you or anyone else may be wondering why I seem so obsessed about all this, the explanation is in the way I choose to invest in opportunities such as I believe is presented by Stellar Biotech. And before I tell you, let me say this with sincerity. I DO NOT recommend ANYONE else go this route.
Over my 30-some years of investing my own money and advising others about thiers I had exactly three occasions to do what I’ve done with SBOTF. And this is the third of the three. The other two were (1) Telephonos de Mexico in 1986 when it was a total disaster and trading as an ADR for 0.125 per share. I examined it as well as I could (no followers, no analysis, no reliable data coming from the Mexican government that owned and operated it at the time) and shared my common-sense thoughts about what COULD happen with three clients. Two of them bought it, one putting in $100,000 USD, the other $10,000. I put in as much as I could a week after them. We waited almost exactly 8 months. Most of what I felt could happen did happen, and we all sold about the same time for $0.84 – $0.88 per share. A seven bagger in 8 months. That’s some serious money.
I actually didn’t have to wait long before #2 came around. But it was vastly different in all ways. Although a new company with a novel idea, it was owned and run by a businessman that had relocated his operations to Ft. Lauderdale a few years prior. Since my office with Merrill was less that 1/2 mile from the little building he had acquired on Las Olas Blvd., I passed by his front door two or three times a week on the way to lunch at one of the cafes on that hoi-poi shopping street. The man is Wayne Hizengua (sp), founder of Waste Management, and the guy who was bringing his new company to market in an IPO soon – Blockbuster Video.
This time I went gangbusters with clients to try and get them to put some money into this business. Many did, although we couldn’t get shares on the offering – way too much oversubscription. And I was shut out from buying in that manner regardless due to SEC restrictions. So we had to let the stock open and then buy – and paid a couple dollars more than the initial price. This was summer of 1987.
I – and most clients – just held as the company prospered in consolidating what was then a scattered, unorganized collection of thousands of Mom-and-Pop video rental business all over America. That was the vision – consolidate a fragmented business, organize it, streamline it, price it reasonably, give all locations an inventory to match demand, clean it up, and let what happen, happen. It workd. Man ‘O man, did it work!
On Sept. 29, 1994, the annual stockholders meeting was held in Ft. Lauderdale which I attended with six clients in tow. Wayne announced that Blockbuster was merging into Sumner Redstones entertainment empire, Viacom. Stakeholders in BV would be getting shares of VIA at a substantial premium. Overall, since the IPO, investors like us that had stayed the course from soup to nuts reaped a total return slightly above 4,000%. That’s not a typo – it was a 4,000% gain in some 7 years. I took the clients (all ladies in their 60’s and 70’s by the way) to lunch after the meeting close by the old Blockbuster HQ. What a wonderful day! A few days later, after examining Viacom, I decided it was time to exit stage left and recommended all to sell their BV holdings at market price before the conversion. The main reason was that we had bought BV for a specific reason, and now that it was being folded into the other businesses of Viacom, much of the impact it’s earnings and growth might contribute to the overall results of Viacom would be diluted. We no longer had the same company at all. Most sold and we moved on.
Since that time I have not found any company that called out to me in the same way those two did. Oh sure, there have been plenty that performed like this, but I missed them. Then that tease which Travis covered so well from Nick Hodge showed up just a few weeks after I became a Gumshoe participant, those same faint bells and whistles started resounding in my head, and after examination and consideration, I was hooked. And I acted, although two weeks and $.025 later than when the first thoughts of doing so occured to me. I could have bought at $0.67 – but I hesitated and got in at $0.92. No matter – things have worked out quite nicely since anyway.
All this brings me to the admission of how I go about investing in situations such as we have here. And I repeat, I don’t recommend it to anyone. It’s way off the mark of standard financial planning. It’s high risk. And it tempts with high return if successful. Here’s what I do, and what I have done with SBOTF.
If I am convinced that a company has a critical product or service, is in an early stage of development, has a good chance to make things better in a relative hurry, isn’t yet widely known or covered by financial sources, and is trading at a price that enables me to buy a LOT of shares, I don’t mess around. I ask myself – is the amount I am thinking of putting in such that, if lost, would cause me to actually change my lifestyle? If so, I cut back. If not, I proceed. Yes, I’d hate to lose that sum – but I would still do all the things I currently do if it was gone. Then I ask myself this; if things go as I think they could, do I have enough in so that this just might change my life in a positive way? If not, I up the ante. If so, I pull the trigger.
In the case of SBOTF, I put in nearly 25% of my entire investable assets. That’s right – 25% of everything I had. Any competent Financial Advisor would tell you I am off my rocker – they’d tell you to keep this sort of high risk speculation to a maximum of maybe 2% of total assets – and that may be too much. I know this – I was one of those critters, remember. And I never suggested a client do anything like I do. I have an understanding of myself that lets me take these sort of risks without a lot of worry.
Why do I go so strong into such situations? Because I know that if you want to win big you must risk big. Would it do me any real good to take the risk and wind up with, say, a gain of $1000? That would be nice but would not change a single thing in my life. Except maybe then I’d go buy that 60″ flat screen I’ve been lusting for these past two months. But other than that all I’d have is a faint regret that I hadn’t acted on an idea that comes along only seldom when I had the chance to do so. I hate that feeling – the feeling you get when you realize you were finall truly right about something yet didn’t have the conviction to go for it in full.
I view these special situations and act on them in exactly the same way I gamble, if and when I gamble in a casino (very, very seldom). I won’t sit at a roulette wheel for hours, making $2 dollar bets on a spin. Nope. I just wait until I’m passing a game in progress and, if i get a strange feeling and have a random number pop into my head at that instant, I’ll drop everything I intend to spend on that game straight up on that number and wait for the ball to drop. If it’s wrong, well, I just lost my stake that I set aside for that purpose. That was gonna happen anyway. But if it hits .. I’m taking home 32X my money. And believe it or not, I’ve had that happen 3 times in my life as well. It just occured to me when I wrote that – three times in the market, three times in the Casino. Maybe a number I want to remember.
Anyway, as relates to my position in Stellar, I stand to make several tens of thousands of dollars if this becomes a 4 or 5 bagger. Or I’ll lose an amount I would have preferred to keep but won’t really have an effect on me as I go about my life. Seems a decent risk/reward trade off to me. But I am me, and you are you, and I once again say DON’T ASSUME THIS AS YOUR METHOD OF INVESTING.
That’s why I’ve been at this computer all day. Still no news release, and since it is now 3:15 PM, I don’t expect one until after the close. Then we’ll know.
Lordy mercy, I love this stuff :0)!
The Blind Squirrel – Jim Skelton
I have a feeling that a buy out is imminent. One of the big biotechs sees what the rest of us see. The good news is that we will make a nice profit. The bad news is that we wont have the fun of riding this wave for months/years to come.
Here is what I got back from Stellar on my email inquiry. Not much but at least something.
“Dear Mr. Rose
Thank you for your email and your interest in Stellar Biotechnologies. Stellar has placed a halt on trading of our stock (TSX:KLH, OTCQB: SBOTF) pending a news release. We will release the news as soon as possible however the timing of the news release is not yet known. Trading of the stock will resume again after the news has been released. Thank you again….”.
Jim, nice recount on how you invest. I rode the wave during 2000 on day trading with the heart pounding by the minute each time I hit the ‘enter’ key. The best I did was with the folks that had the patent on thumb drive technology and the worst when Rite Aid tanked. We do learn our lessons. I do like the long shot startups and new technology stocks as I listed in a previous post. Usually I will have some knowledge of the industry or product process before investing. And like you, buy a bunch at sub dollar (not always but I try) and a lot to make it worth while if it goes in the correct direction. Also, I’m with you on ‘don’t do this unless you can afford it’, high risk can be high loss, but the thrill of high gain is the other heart pounder.
Hopefully some news before the open tomorrow.
Logically, a partnership or a buyout is in the works–Stellar just announced all the latest research news in the past several weeks. What else could it be?
Roger, oddly enough I’ve never tried my hand at true day trading. I suppose I ought have given it a go but just never did. As I said in my note, I’ve only had this strange sense of pending profit three times since 1986. I bought with abandon in all three cases. The first two worked out beautifully and that is what got me hooked on the idea. And now this – which I agree with several others here will turn out to be some sort of merger or major joint venture with one or another Pharma company. I’m torn as to whether or not I’ll be glad to see that. If it’s a takeover at a very signifigant premium I’ll appreciate the quick cash. But I’ll miss the excitement of owing a company growing like this with what I think is such great long-term potential. Have no candidates in mind with which to replace it. Remember – “Be careful what you wish for. You just might get it.”
Jim, as I mentioned in a follow on post (which should have been a reply and not a new thread – apologies.) I’m hoping for, at the most, a partnership with an established Pharma. With a buyout, as you mentioned, would be ‘some’ quick cash but I like you like the joggers high, rather than the sprinters high. The buyout would, in all probability, be the IP and the rest of the folks fade away. (seen it, been there)
I’m wishing for the partnership.
I hope partnership and with an established pharmaceutical or integrator. See the Presidents letter on Stellar’s web site.
Whatever the news it is very likely to be very good for the stockholders in the short term. Since the stock had come down a bit in the afternoon on 8/20, I added 25% to my holdings just 3 mts. before the market closed on Tuesday. That may have been my best gut instinct move ever!
So I’m not alone? I added more right before too! We shall all meet for dinner hha
ALERT:
IIroc has removed the trading halt on SBOTF. No news story has yet been released by the company to explain the requested halt yesterday. No trades yet executed. Stay on watch – something is about to break out.
The Blind Squirrel
Jim Skelton
The news was a private placement, priced WAY below current market price ($1.05 for a share AND a warrant), absent other developments or news I would suspect that will probably drive the shares down: http://finance.yahoo.com/news/stellar-biotechnologies-inc-announces-us-130500744.html — there are no earnings to dilute yet, but that’s significant ownership dilution. Of course, that price WAS the market price just ten days ago, since the stock rose a good 40-50% since early August, so it’s not unreasonable from that perspective.
This, undoubtedly, was one of Mexican businessman and CPA Ernesto Echavarria’s buys; I’ve been reading up on him and his dozens of what are described only as “Buys or Dispositions” of shares of Stellar. Unfortunately, they don’t give clear information on whether each transaction is a Buy or a Sell. Elsewhere, I did read that he holds over 20% of the float. He is also an insider (i.e., holder of at least 10% of shares) of several other companies–he seems to have a sweet tooth for Canadian Juniors–and has a controlling interest in Frank’s fruits and vegetables in Mexico. Several of the companies in which he is an insider have earned the attention of the SEC. I ran into a blogsite entitled “Neer do well Hall of Infamey” Here’s a link:
http://neer-do-well-hall-of-infamey.blogspot.com/p/clive-massey.html
You’ll read, here also of many companies in which shareholders lost millions, such as:
http://www.mineweb.com/mineweb/content/en/mineweb-junior-mining?oid=187170&sn=Detail
Rye Patch Gold (RPMGF), Redhill Resources (ATWGF), Animas Resources (Sold to GoGo Gold, Copper Fox Metals. And there’s Solotro, Blackheath Resources. The list goes on and on, and the same people keep showing up.
Is Mr. Echvarria complicit in these deals? I’m not aware that he’s been charged, but I find it very suspicious that he seems to be an insider in a lot of these companies, where shareholders lost their shirts.
And I have to say that the massive selloff in Stellar, since early April smells of burnt investors.
That is old news from 2013 when they got on TSX and OTC….
WELL, THIS IS THE CHANCE YOU TAKE WHEN INVOLVED IN ISSUES OF THIS TYPE. LAST TRADE AT $1.12. a LOT OF DISAPPOINTED FOLKS OUT THERE RIGHT NOW – ME INCLUDED.
jUST REMEMBER THAT THIS REDUCTION IS DUE TO THE DILUTIVE EFFECT THE ISSUANCE OF SHARES WILL HAVE ON THE PRICE. NOT ANY MATERIAL EFFECT ON THE IDEA BEHIND THE COMPANY OR ITS PROGRESS IN PRODUCING THE KLH OR THE OVERALL BUSINESS. I CAN ONLY ASUME THIS WAS NECESSARY TO RAISE ADDITIONAL CAPITAL TO KEEP THE COMPANY MOVING AHEAD WITHOUT WHICH THEY COULD BE IN TROUBLE. SO, PUT ON YOUR BIG BOY PANTS, TAKE A DEEP BREATH, AND SOLDIER ON. THIS STORY ISN’T OVER YET – NOT BY A LONG SHOT.
We just got barbecued. It’s hard to believe that a company can legally manipulate it’s stock price to raise money when the market had priced it at 1.49 and rising. I’m furious. Given the details of the announcement, I don’t see this stock going much above 1.10 for the next three years–perhaps I am missing something. Help me out here.
David, sometimes this is the only way a small company can raise funds to continue in business. Other avenues of more convential financiang simply aren’t available – too risky. So the company has to offer a very sweet deal to attract that capital and be sufficient to reward the risk taker – the “lender” if you will.
This 12 million or so that will be raised is going to be used to keep the R&D efforts running, not pay big alsaries to company officers. And that is needed to survive with an eye to future prosperity. Anyone who invests in this sort of speculative company must accept this sort of risk. I have no idea where you get the concept of a $1.10 price celing for another three years. You may be right. But I don’t think so. if you do truly believe that I would think you’d be selling right now. Lots are folks are if I’m reading the bid/ask spreads and volume right. That’s fine with me – all speculations have a time when the nervous nellies have to be shaken out. This is one of those times. Me, I bought into this with a 5 year time frame. I pulled about 30% of my stake off the table at a profit of $0.33 per share a couple weeks ago. I’m still in positive territory to the tune of about $0.20 per share – and I have quite a few shares for someone like me. I’m staying with it. I still believe in what they are doing. And I want to be there someday down the line wheren this is just a small footnote in the history of the company and I just might be rewarded with profits that are fivefold or more of what I have in.
But that’s just me, right or wrong. Now’s when everyone that has ridden this runaway train must decide for themselves what they truly believe and act accordingly. Now that I think of it .. I just may buy more today or tomorrow. If I liked the company and it’s prospects at $1.50, I gotta LOVE it at $1.10!
A bit of perspective on todays pricing of SBOTF. Imagine that you had embarked on a cruise two weeks ago. It was an “unplugged” cruise around the islands with no cell phone connection, no internet, no twitter or facebook or anything. Just you and the tropical breezes. Today you arrived back in port and after getting home fired up the computer to see what had happened to your position in SBOTF while you were gone. You’d see this quote and just shrug, then go unpack. Because the price would be unchanged from the day you left. A non-event. And you’d not be upset in the least.
I got my first real introduction of how we sometimes have to view things when I attended a meeting of all South Florida area Merrill Lynch Financial Consultants in mid-November 1987. The keynote speaker was Sir John Templeton. He had been called in to speak to all of us shell shocked advisors that had just gone through the worst market crash since 1929. We even saw two of out fellow employees get shot – one killed – by a distraught investor a couple days after that event. We needed some reassurance, some perspective on all that had happened and how to deal with it. Sir John was just the man for the job.
He spoke for about an hour, trying to reassue us that this too would pass and that the markets would recover. Indeed, he even said we’d see new heights in the Dow within 5 years. Maybe less. His was, as always, a calm voice of reason admist the swirling currents of disbelief.
In that talk he said much the same as I just did above. He pointed out that, if an investor had fallen into a deep sleep on January 2, 1987, then awoke on November 1st, when he checked the market indices he’d think the entire year had been a total yawn. Market basically unchanged.
That analogy helped me regain some sense of balance and perspective. And even though many of those attending this talk guffawed at his comments that day – shame on them – his predictions for a bright future in the US markets was spot on. Sir John was truly a one-of-a-kind of a man and investor. I miss his wise council.
So put this little event into the proper perspective. The decline just suffered only puts investors back to where we were two weeks or so ago. You were happy and optimistic then. Regain that.
The Blind Squirrel
Jim Skelton
It ticks me off that corporations can basically screw the small investor by manipulating their stock price so that the insiders can be positioned to make a killing while the common Dave gets creamed. This wasn’t a free market dip in the stock price Jim–it was directly linked to an action that will benefit the company insiders. At times like this, I wish I had a law degree. It just isn’t right. The free market should determine the stock price–not a dilution of the shares by the company so they can get more cash flow.
David, you can always file a complaint with the SEC, your congressman or whomever else is in a position of authority to change the rules. Not that I don’t disagree with you, your point is well taken, the wealthy make the rules that’s why they are wealthy (and in politics).
Jim, I’m with you. I have not even looked at the stock yet this morning as my notification of updates to this blog was the first I read and came straight here to read what was going on. Why did I not jump straight to my ticker? As you say, it doesn’t make a hill of beans when playing in the ‘high risk’ market place. I will check the price after these comments are done and probably buy some more shares and average down my cost. I look at these types of positions as either profitable because they make it or they drop off the grid (as it were) if the management can’t keep the company going. Dollars spent, dollars earned, just depends on the net in the end.
How fun it is to see the panic, it just gives folks like you and me Jim the chance to average down.
I just read the announcement on the web site.
Jim, you will have more insight into this than I so your comment is requested.
Why would the company (or any company) that wants to raise capital not offer a discount share price to the current holders on record of the stock and (as per David) give current stock holders a chance at a piece of the tastier pie. And, the company would not have to pay 7% here and 5% there on commissions etc. I can already think of a few reasons but would like your perspective.
Things sure are heating up in LimpetLand. Before I say anything else, this disclosure: I mentioned I might use this pullback as an opportunity to purchase additional stock. I have done so. I added a bit to my holdings by buying 1500 shares at $1.1755 earlier today. Good move? Ask me again in a year. Only then will I have a more reasonable idea.
Now, David. David, slow down a bit. I mean no disrespect to your feelings You are well and truly upset by this but you are off the mark with a couple of comments and beliefs.
First, this action is not “stock manipulation” in an form or fashion. The word “manipulation has a dark and malicious connotation. That is not what happened. The company used a method of raising investment capital that is quite common throughout the corporate world. Essentially, they just sold stock into the market to raise additional working capital. Big companies can accomplish this in a more simple fashion, just by releasing enough treasury stock to the general public and taking in the proceeds. It is dilutive just as this was. But most often they are so big that the hit to price is hardly noticeable.
Stellar Biotech does not enjoy that luxury as there is no Treasury stock to release. This was their only way to do it. They had to attract what is basically venture capital from some group I have yet to uncover. That will be known soon enough. They had to price the stock at a low enough level to convince these new investors to take on the risk of putting this sort of money into what is actually an unproven company. The warrants are a sweetner that will only have value if Stellar continues to be successful in the push to complete the business plan and bring a sustainable, top quality KLH product to the market and then find buyers that will pay for it. You can take some heart from the fact that those warrants have a strike price of $1.35. That indicates that the new investors feel confidant they will see a price of $1.35 or better within the exercise period of three years. If not the warrants will expire worthless, and these folks aren’t in this game to see something go worthless. So if you need to set a mental minimum price target for the company within a 3 year time frame, $1.35 is a good one to hold.
As I stated earlier, this is not some scheme by insiders to rob from you and I and give to themselves. They aeen’t getting this money to pocket. They are getting it to provide the cash needed to continue the development of the business, get production underway, increase sales, and eventually turn a profit. I would suggest that anyone who thinks they are holding shares of a company where the management can’t be trusted to be working in the best interest of the company and all its stakeholders get out immediately. I would not work for a company where I couldn’t trust the managements integrity or competentance. Remember; as a stakeholder, you and I are owners, not just passive observers. Our fortunes rise and fall with the fortune of the company. As does the fortune of management and Corporate Officers. Our money is employed there, working for all of us. If a person senses treachery afoot, flee the scene.
As to why didn’t they just turn to us, offer a similar deal, and raise the capital in that manner, I can only say this: Although I can’t quote you line and verse any law that says this couldn’t be done, I’ve never seen or heard of any such thing. If anybody out there knows of an instance where this was done, please tell us.. There are so many rules and regs in the security industry that I suspect this practice is outlawed. One problem I can see with it is that if they made the offer, there would be no guarantee enough people (current owners) would step up and subscribe. Therefore the company couldn’t know how much they might raise. The deal they struck here lets them know exactly what they will get and when from the new investors. Certainty is a good thing. Uncertainty is not. So even if by some miracle they could have done that, it would be an uncertain venture, messy, prolonged, and unsettling – all of which could have a much more severe impact on share price than this. And besides, it would still dilute the float and cause the exact same thing to happen to the stock price as we are witnessing right now.
Understand.? No matter how a company goes about raising capital by issuing additional stock, whether to you and I or a new investor, the effect is exactly the same. And that IS part of a free market process.
And as for the fees and incentives being paid to the manager of the offering, this is standard business practice. Those folks are doing some serious work in getting all this completed and the transaction finished on a timely and totally transparent basis. They deserve to be paid for their work just as you and I do for ours. Don’t resent that. It’s called Capitalism.
To conclude, I sugget that as painful as it is to see the price decline today, remember a couple things:
First, those profits most of us were seeing on our statements? Those weren’t really ours. Does that statement shock anyone? Until an investor actually sells the stock and recieves the cash, those “paper profits” belong to what I call “Mr. Market.” And he can and will take them from you at any time. It’s an illusion we create that the gains on the statement somehow literally belong to us, you see. In some way they do – but in another they don’t until realized.
And last, this transaction to raise operating funds is a good thing for us all in the long run. Not today for sure, but eventually. It allows business and product development to continue. It allows the company to expand and grow and hopefully become the company we all think it can be. And we will be amply rewarded for that if and when it does. You don’t want to try to sue anybody. That would be jousting at windmills because they did nothing wrong. And it would cost you a fortune in legal and court fees if unsuccessful – which I think it most certainly would be. There are no villians here, no plot to rob you and I, no conspiracy underway to pull from my pocket and transfer to someone else. Just a financial transaction that had to be accomplished to keep those Limpets happy and procreating and giving up thier very lifeblood for our benefit. What wonderful little critters they are.
To quote Malcom Forbes, “With all thy getting, get understanding.” He was quoting from the Bible, Proverbs I think.
We need heed those words today.
Regards to the Gumshoe Nation ..
The Blind Squirrel
Jim Skelton, signing off for now ..
Well, Jim, I obviously know nothing and you know everything. If this was such an innocent fund raising venture then why when I just tried to get in on the “private offering” of $1.05 a share with the .5 warrant I was denied because I am not a an “accredited investor.” I had no problem buying shares at $1.49 a share on the afternoon of August 20 but I can’t get in on their sweet deal today. Why–because the odds are stacked squarely against the small investor and in favor of the rich and those with inside information. If you don’t think that there are people at Stellar who are padding their salaries and helping their buddies get in on a discount price then you live on a different planet Jim.
David, no, I don’t know everything. But I have been fortunate enough to be in a position for over 20 years where I learned a little something. In addition to working as a Financial Advisor with 4 of the biggest Wall Street firms, I also served as an industry arbitrator for about 3 years after retirement, hearing and deciding outcomes regarding lawsuits investors would file against their Advisors and/or firms. While I didn’t do all that much, I served on enough panels to peel the onion a bit on the legal side of the industry and picked up a bit of understanding in that manner. Bur know everything? I’d never make claim to that. I know little, and I try to learn more every day. I stand ready to be corrected on any issue if given facts to decide by. Not opinion.
Requiring an individual to meet the criteria of being an accredited investor is a policy set by the SEC and has been in effect since seemingly forever. The intent of this restriction is to protect a person from themselves from getting into a high-risk situation that they may think they are capable of handling at first, then finding out they aren’t if things head south. That’s the kind of situation that arbitration cases are made of and the SEC thinks it’s wise to stop it before it ever has chance to bloom. It’s called “suitability of investment” and that makes up the basis for a great many arb cases that get filed.
Again, it’s a long-standing SEC policy, not some contrivance of the Officers at Stellar Biotech. I’ve been excluded from a few opportunities myself over the years because I never met the criteria and, like you, I felt indignant at the assumption made by some faceless committee somewhere about my capabilities and abilities. But in hindsight it probably did keep me out of some trouble.
Now, gather the facts to support your assertion of insider trading, cronyism, and malfeasance and send them to me. Facts, not conspiracy theory ravings. If you can supply those, I’ll be the first to step up and help you get that lawsuit underway.
I won’t hold my breath .. here on the planet where I live, the planet called reality, breathing is necessary for life.
added 1000 @ 1.13 limit filled at 1.12xx averaged down some. here we goo
I mean if you were buying the other day at 1.20-1.50
why wouldn’t you buy when on sale at 1.15+/-?
wish I hit that .999 this morning, lucky bastard! probably was you Jim!
Maybe I’m over reacting but it looks to me that the company’s private offering just about guarantees that the stock wont go much above 1.35 for the next couple years unless they get some incredible good news and/or earnings surprises. The presiden’ts optimistic letter in early August certainly gave no indication of a cash shortfall (and the stock soared after that). I feel duped right now. Hopefully, I am wrong and the coming days look much brighter for this stock (and my portfolio).
Bought at .55/ share, watched it go to 1.49. Now it’s about 1.15. I think were still on the gravy train. Folks didn’t put up $12,000,000. for window dressing. I see a Buy out at about $3-$4.00
I sure hope that you are right J. R. I’d love to have egg on my face after making money rather than losing it : )
Thanks Jim for the education.
I don’t begrudge being paid for hard work, I just thought that it could save money, pay yourself instead of them, as it were.
David, hear ya are:
ac·cred·it·ed in·ves·tor
1.investor meeting certain standards: a person or organization judged suitable to undertake an investment, based on criteria such as experience, net worth, and income levels
What hurts is that had this same thing happen a bit ago with Liquid Metal (LQMT). I’m down (a bit) but not out – long term folks, this ain’t day trading.
Keep smiling and hope for the 3-4 bucks.
And….
The three hour break we had was oh so wonderful. I haven’t heard anywhere if this was due to a hack. And wow if it was!
Perhaps Stellar suspended the NASDAQ pending an announcements LOL
Jim: Of course Stellar is playing by the rigged rules of the rich, if they are indeed playing by the rules. They have plenty of fancy lawyers to cover their tracks so that they can get away with this baloney–like suspending trading for a full day, sheesh.
So if I’m being protected now from myself so I can’t buy shares at $1.05 how come I could buy as many as I wanted to at $1.49 on Tuesday or as many as I want tomorrow for $1.14–there is no logic to that argument. It’s a rigged game. I must say that I have indeed received an education today and it’s made me a heck of a lot more jaded regarding the ways in which the rich get richer because they write the rules to benefit themselves. History repeats itself–the top one percent screws the 99% over and over again. I’ve been foolish enough to think that if I do my homework and stay on top of things that I can succeed just like those who write the rules to benefit themselves.
If Stellar was being such a stellar company, then why didn’t the president disclose that there are cash flow problems in his glowing optimistic letter from just two weeks ago. There is definitely a lot of manipulation going on, legal or not. Only a pompous moron would deny that.
David:
It’s unfortunate you choose to think of me as a “pompous moron.” That is the implication, right?
I’ve been thought of as worse. And I will not allow myself to get into a game of schoolyard name-calling. This is a forum of ideas and opinions where everyone ought be respected and the exchanges kept civil. We can agree to disagree at anytime. But that disagreement need not, indeed ought not, become disagreeable.
I regret that I cannot seem to penetrate your belief that this entire thing we call “investing” is “rigged” against you and I. It is not. But not all things are done as we might wish they were if left to our own devices. For example, you question why the Presidents letter of a couple weeks ago made no mention of cash flow problems or the deal that was being hammered out to resolve that. The answer is quite simple: He and all corporate officers like him have to work under very strict guidelines regarding certain types of sensitive information that they are privy to during these discussions. Letting that information out and into the mainstream can result in some serious charges being brought against the officers and board of a company. Why? Because there is no way to ensure that the information will reach the ears of ALL interested parties at the same time that might be affected by whatever it is under consideration. That news must be delivered very carefully and under strict SEC rules – not the rules the board might wish they could work under.
I’ll leave this at that and sign off on our exchanges. You say you are now jaded and convinced that you, as an individual, cannot win in this process. I’m sorry you feel this way, but that is your right and I respect it. Perhaps time and additional study will change your mind – or change mine. I don’t know how you are going to save for retirement, provide a venue for putting your money to productive use, and thereby ensure a brighter future for you and yours outside this process. I hope you discover it, though. Good luck, and I mean that.
Sincerely,
The Blind Squirrel
Jim Skelton