Basic DD on FOXO
I found it in the usual morning routine... cup of joe.. look at finviz for a screen of top gainers... look at them to see who is moving and quickly figure out why to see if there is a trade, and what/when that might be.
FOXO was rocketing higher... up to $0.29 from flat at a dime... And, for good reason... they were awarded - "a Patent Leveraging Machine Learning Approaches to Enable the Commercialization of Epigenetic Biomarkers".
Basically, they're like the DNA companies that look at your genetics and tell you what sort of mongrel you are... (I'm Dutch / German... and exactly the same amount of Native American as Elizabeth Warren) based on the origins of your ancestors as recorded in your DNA. But FOXO was using that bit of testing to look not so much at "origins" but at epigenetics... to see what your DNA says about your potential health risks...
They use AI to look at epigenetics... evaluate your risks... and then tell you what you should think about doing in diet, exercise, drugs, etc., in trying to live a bit longer. And, since that's the focus... trying to get you to be healthy and live longer... they pair that with selling you life insurance... which makes perfect sense as it aligns their interest with yours ?
It seems a brain dead obvious business... but, making it work well enough to make money at it... would probably require social skills a bit beyond those of your average insurance salesman ? But, that gave them TWO businesses... each of which should make money IF the opportunity / products were properly marketed.
Clearly they weren't. So, as I've noted recently in discussing what to look for in bottom fishing for potential survivors... the board began throttling them back recently... fired the CEO, fired the CFO... fired a bunch of people generating ongoing unemployment obligations... and as part of a strategic review process they say "they've only begun"... but expect to complete in October... they hired a new CEO / CFO team... who just happen to have a business of their own that they "might" want to have be acquired by their new employer. <rolls eyes>.
Then, trading along flat at a dime... they accidentally lucked into have the USPTO gift them with a patent on the use of AI in epigenetics... and the stock rocketed into a 3X. But, then, shortly after I posted on it... it crashed and burned just as quickly ?
"Suppression trade ?" That's what I noted in observing it... that it doesn't look like it got shorted in the usual way... by shorts expecting it to die and hoping to help kill it. Instead... it crashed right back down to a dime and stayed there, flat, in a trade conducted on elevated volume.
Poking at it today... The Latest 8K defines October "decision point" and likely future.
A few notes on which first... I still have to question why the prior business(es) didn't work... and why the board appears to have decided to throw the baby out with the bath water... only to have the baby suddenly step on stage to accept winning an award as the best baby in the business ? The patent award seems to have demonstrated that there is a problem on the board... as they failed to recognize the value... failed to ensure it was properly financed... and failed to ensure the value they had in hand was being properly curated... prior to achieving "financial failure." The decisions we see playing out now clearly weren't made by CEO/CFO rather than the board... but, the old CEO/CFO clearly weren't getting the job done, either, for some, now perhaps obvious, reason. So... who's fault is that... and it means what for the future prospects ?
As a non-participant in owning this stock, thus far... what to make of it ?
A short answer might be... they just got gifted this patent... so they have a new "value" in hand... and they're talking about shedding "non-core" assets to raise money for Plan B. Call that a win for team Plan B if they can succeed in marketing the patent and selling it for good value... but, not much reason apparent for confidence on that "marketing" score, just now . But, it might make more sense, for investors, to follow the events to see who buys the patent... ?
Interesting to note, though, that the Plan B on deck... is also an AI focused company... having tacked that "ai" tag on top of their already existing web focused business...
It looks like they're going to be... as KR8.ai... focused on AI applied in helping you (or your company) manage your social media messaging ? Apparently, there's an app for that... and they made it.
That makes sense, perhaps, if FOXO were shopping around for marketing solutions that would help them fill the too obvious holes in their interactions with the market... ? They found KR8 to help "fix" that problem... and then decided they'd rather be in that business than the one they were in ?
But, if KR8 can't fix the problem in the opportunity they own... why should you trust them to fix it for you ?
But, reality here... it's a trade, maybe... They're going to "shift gears" and become KR8... and apparently plan to and need to "get that done" in October... and while that's cooking, there's a suppression trade being used to cap the stock to prevent it running away from them... and, probably, disrupting their planning on the financial components of executing a deal... which becomes a problem if the stock suddenly "revalues" itself.
Assume they do some deal... and, then... ? It's still at a dime... with little reason in proofs that might generate confidence in Plan B. So, probably, a deal done will need to include a re-shuffling of the stock ownership... and, as long as doing that... might as well alter the share structure ? Reverse of 1 for 20 (or more) would get it up to $2 (or more) nominally... and give it a chance at retaining the listing.
So, for now... DD will mean... poke at the competition in the patented AI in epigenetics space... and poke at the available elements you can find re KR8...
Newsletters they publish on LinkedIn... and given this is who the U.S. team are... are they the same thing... or is there some branding issue creating a conflict there ? |
