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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.
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 ?
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One Horizon Group which was once trading as OGHI, defunct, since May 2019, apparently, but appears it has been reincarnated, or has the same team as, and is now "trading" as Touchpoint Group Holdings TGHI with 3.44 billion shares out, and a (Yahoo Finance) market cap of $3,442 ? Yahoo says the last trade was on July 17 at $0.0001, and it hasn't visited $0.0002 since February.
One Horizon Group Plc's business "is the supply of Blockchain and Voice over IP software through its sistercompany Horizon Globex - to find out more, [ DO NOT ]visit us at onehorizongroup.co.uk "
The trail stops there because a UK based software and communications focused company that doesn't have the ability to maintain a secure site certificate is probably not somewhere you would want to follow a link...
It apparently became One Horizon Group Inc's business, only trading under the listing of the parent holding company, at some point...
But, in any case, a series of steps taken, none of which appear to have delivered successes...
Perhaps all they need is the seasoned oversight from an existing team... as from the board of FOXO, who as NASDAQ listed versus pink sheet operators, have greater ability to steer things the right way ? l Somehow, that's not what it seems this is heading toward...
What they note... but don't discuss... is that the "self-funding" aspect apparent in Start Engine raising money for itself... means they are rapidly building an iterative alternative to the existing system...
VC control over valuations... the artificial "stepped" increments in subsequent rounds... all staged in leading to an eventual IPO... in which VC's cash out when selling to bag-holders... err, the public... ?
There is real value in the VC contributions to ventures they fund... they do understand things that matter that many founders will not... but, the market is saying the balance in that value is shifted so far in favor of the VC's that they're grossly over-valuing themselves in the process. And, it appears, the market is well poised to prove that, now...
Alternatives will be required... to enable companies to gain the benefits without the penalties...
VC control over valuations... intrinsically means minimizing the value founders bring to the table, and over-valuing their own contributions... That routinely (intentionally) ends up in founders losing control of their companies... and, as they are weeded out of the ecosystem... continuity is imposed in "how we do things" with "things" being run by the "we are not the real innovators" crowd.
"Real Innovators"... as a rule... will not be seeking to impose control over others ? If we wish to remain free... we are going to have to change the rules to disenfranchise (in market sense) those who fail to agree with, or fail to comply with, that element in fairness in free market competition... that obviates monopoly... by denying admission to participation... to those who seek advantage at others expense... rather than seeking advantage by winning in competition.
Free market = no barriers to participation... for those who play by the rules of free markets. And those who do not play by free market rules... MUST be excluded... or you will not have a free market. No monopoly.
The change under Reg CF will alter that balance that exists now... in part because the lack of inhibitions in coming back to the market for new rounds. That prevents VC's "over-funding" start-ups while stacking them with high costs in a dictated recipe for how success occurs. Reg CF allows for ORGANIC growth at a pace that the market dictates... focuses founders on success rather than forcing a particular pace in scaling to demand... which allows that funding requirements are divorced from the VC's internal clocks, ROI requirements, forced mis-fitting of round peg innovations into square peg programmatic sequencing in "how things are done".
In baseball terms... the VC ecosystem forces every player that steps to the plate to try to hit home runs... but, reality is... games (economic successes) are won based on "little ball" ensuring bases are filled and runs scored without being driven to attempt "hitting it out of the park" on every try. Scaling issues... should be a focus... but, should not be imposed in a way that harms the "start" by pre-defining the "finish".
The change occurring... means VC's have new competition... that will force changes in the landscape. Part of that likely means VC is forced to get "bigger"... but, also, that existing "Angel" type seed stage investors have new competition... and will mostly benefit from that, in lowered risks... and accelerated "teaming" from other capital sources... while avoiding the future need to raise venture capital to enable successes.
An open question whether the change drives "smaller risks" being taken as the scaling issues focus founders on making money sooner... to avoid inviting future capital raising risks.... Or, will it mean risks are better balanced with businesses that make money while working on "more" that is internally funded by profits... "the Qualcomm Model"...
The ECONOMY will be vastly better off because of the removal of obstacles imposing rigidity in thinking, as that is the inevitable result of a one sized fits all "this is how things are done" approach to meeting various and often wildly different requirements in businesses needs for capital...
We're not quite yet to the point of ATM - At The Market offerings being routine. But, the reality is... every business with a publicly traded stock SHOULD be enabled in being their own market maker... with obstacles to participation in the capital markets purposefully favoring intermediaries being removed... because the POINT of having a market is to ENABLE and ALLOW companies to raise capital... and it is NOT to enable intermediaries in making money off others share listings... or enabling them in raising barriers and imposing obstacles to capital access.
The obvious benefits of ATM... should easily be duplicated with other DTC market functions... as occurs in "subscription" investments enabled as DRIP's or other direct share purchase plans.
And, THEN... not only will a lot of the fraud we see in markets now disappear along with "control" enabled now, when companies (and their chosen service providers) run their own book... and have no need for centralized market functions rather than DTC interactions... in a Direct To Consumer decentralized market... rather than the black hole of the "not real shares" trading under the Depository Trust Company ? Honest accounting for shares in trade will force the existing system... that is entirely based on the expectation of "dislocated" functions, removing control from owners, and ownership from owners, while empowering market manipulation as a part of its intent to impose control... that system will be forced to adapt or die...
New forms of fraud will emerge... requiring new counters... which isn't a reason to prevent restructuring now.
If the system doesn't add value... FOR OWNERS... but amplifies risks... and enables others in fostering risks to capital access and share valuation independently of the company and its own efforts... while only those creating the additional risks profit from the risks generated. Then, the system enabling that should die.
There should be... as a matter of principle... a forced division between "the system of money"... banking... and the "system of choice" under which individuals allocations of money are decided. We had that once, as Glass-Steagal... designed to prevent banks from manipulating the markets... and designed to prevent "stock operators" in the markets from taking over control of and manipulating the banks, and the economy. That barrier was incrementally removed (beginning in 1987, and precipitating the crash of 1987) ... which is why we got the dot.com bubble (as "directed" flows creating a bubble)... and the Bank Fraud in Mortgages Crisis of 2008... and, today, the "Everything Bubble"... unlikely to end well...
Re-connect ownership with control (ie., restore ownership)... and most of the problems that have been imposed through centralization... and its penchant for obstruction as enabling greater control... will evaporate. With the larger fraud managed... then you can fix the problem with bad actors in the market... only starting by denying them control of the entire system, first... ?
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E2Open... an interesting trade, as shorts ramped up to 14 million of 303 million shares... institutions owning 105% of the outstanding... It appears selling began on September 18 or 20... took it a step lower on Oct 2, in a bracket trade lasting until Oct 10th... trading at $4.36 Earnings were announced, coincident with announcing they were firing the CEO.... and on Oct 11 it traded down to $2.18... down by half. Stepped higher to $2.60 on Thursday and Friday... stepped higher again today, to $3.
Goldman downgraded them from $6 to $3.50 target on Oct 11...
They are a SaaS provider automating supply chain logistics...
Read the PR on earnings and firings... and it sounds like they've come a long way from losing money hand over fist to being "close" to making money... but they appear to be forecasting "a slow down" in the pace of improvement... struggling with integrating acquisitions it seems... borrowed another $200 million this year ?
I don't like the "feel" of it... but, Yahoo comments capture some detail:
1. From the report: "Finishing up on profitability, net loss for the fiscal first quarter of 2023 (sic) [ 2024 ] was $360.9 million. This net loss figure includes a non-cash goodwill impairment charge of $410.0 million during the quarter. As previously discussed, the carrying value of E2open's goodwill increased significantly as part of our IPO transaction because it was reset using the offering price of $10 per share. GAAP requires companies to continually monitor goodwill carrying value by evaluating potential triggering events, including share price declines."
So, they wrote off $410 million in vapor to wipe out a $50 million profit... while forecasting, for some reason not well defined, that things appear they're not going to be getting much better for the next year or two ?
2. Prominent Activist Investor, Elliott Investment Management, just disclosed a 35% increase in interest, filing an initial form 13D for the company. Economic interest now representing ~13.8% of shares. Suspect that's why the stock is ripping today. IMO Elliott is a total powerhouse in effecting corporate change, strategic initiatives and unlocking equity value. Happy to passively buy and ride alongside Elliott and allow them to do the heavy lifting of pushing/forcing changes that create shareholder returns.
Media are reporting that Elliott is looking to take them private... so, a buyout possible... at what price ?
3. thank God they fired CEO
Can't weigh in on "the nature of the problem" with a quick dip... but, not hard to parse the potentials...
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Did the deal about three weeks ago, the SPAC sold its IPO in Feb at $10.84/sh. The deal done puts $20 million cash into the company... and it came out pricing it at $10 a share. A spike to $17, a drop like a rock to $6... and then rolled into a gently curving down hill slope, now $2.
Sketchy SPAC... ? HQ in the Cayman Islands... ? Or ?
There are reasonable questions about the business model being touted as innovative...
Take successful Phase 1 subjects that the parent company doesn't want, guide them through Phase II, and then sell them off to companies looking for solid new product potentials to run the Phase III themselves...
That doesn't seem all that innovative to me... just the "same old". Market inefficiencies might explain getting a good value from a larger company if they're shifting focus, etc. The market is a big enough place there's always going to be that happening... but, everyone else is doing the same thing, all the time. So, the innovation seems to be... finding potential winners, keep them alive, and re-sell them before they win.
Maybe a "niche" that can be defined by being a Phase II specialist... ? But, obviously, the big value is with a solid win in Phase III... and Phase II winners often fail spectacularly in Phase III, even after looking like a cure for aging and death in Phase II. So, it appears they're really targeting the lowest value segment in the value creation chain... while focusing on "process" far more than they are on technical "problem solving". Perhaps they can win lower overhead with that approach... as a benefit.
They don't appear to have done a very good job of selling the value proposition... I looked for a Youtube vid with them selling me on it... and found this instead... which might be making the problem apparent as "the need to sell potential partners on you being the right choice for them to entrust with the care and elevation of their baby"... as shown in this quick and exciting description of "how it works"...
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By now you're saying, Sense, I've had Eynovia for today... and yet, EYEN might be more worth a look than the last couple of DD disappointments ?
It's a company that appears to have everything going exactly right... and yet... the stock keeps going down ?
On June 26, on a one year chart, they completed the right shoulder of a classic head and shoulders chart pattern... "coincidentally", on the exact same day as they were added to the Russell 2000 and 3000 indexes... creating a forced demand for shares... and, also, a sea change in the "skills" of those managing to acquire the required shares at lower prices... along with a big shift in the focus of those making the comparisons. Moving up from the minor leagues to the somewhat less minor leagues... comes with challenges.
That includes... a new crop of investors who aren't going to go nuts with "to da moon" crap every time there's a bit of news... even if its good news... "it's not about you"... anymore. But, also, note the pace at which they're raising money now... split 50/50 between debt and equity... and... wait for it. While you wait... notice the market we're in ? The one year chart pattern on EYEN looks a lot like the 6 month chart for IWM... so, coming off its own right shoulder on the one year... it jumped onto the right shoulder of the R2000 on the 6 month...
Do the due diligence... but trade the chart... Take a look again around the first of November... after seeing how Halloween goes in the markets, this year... ?
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PLX Profitable. Sales are a 3X yoy, now at $1.20 a share. FDA and Euro approvals won in May are likely to drive continued growth... and, the timing appears to be indicating a blow out quarter coming in the Sept 30 report. Last year, the Sept report was published on November 14th... so look for the next one around mid-November, again ? And, then, a swing at another FDA approval in Q1 of 24. But, it's already looking pretty solid, with cash of $0.70 a share, which is twice the debt... and sales growth adding to profits. The PE at 50 is likely to decline abruptly, soon.
Five year chart is a giant cup and handle...
Like the prior post on EYEN... PLX was also added to the Russell 3000 five months ago... announced May 19, again, right after a giant pop and a drop... the addition then driving a particular, similarly changed, dynamic in the trading, that is likely not what most shareholders will tend to expect from the "upgrade" ? Welcome to the "deep" end of the pool. The good news is now merely "met expectations"... and the expected performance is "tracks the market" of which it is but one part ? Here's one analyst, from Zack's Small Cap Research, back in May when it was at $2, already puzzling over the pattern of a constant string of good news being delivered... paired with a dynamic in a continual decline in share price... and a suggestion for a future target price.
A wild card in geopolitical risks... as the company is in Israel. A letter from the CEO says they're not near to or directly impacted by the violence...
That last bit... suggests a need to scan for others being disrupted by the outbreak of war... useful to develop a short list of those worth looking at, having it when the risk abates might be worthwhile. Probable others have done it already... and just need to search for them.
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PLSH... as the new parent of Halucenex... and also Sierra Sage Herbs... and other recent acquisitions.
Prior to Creso / Melodiol throwing in the towel and selling their subsidiaries... they'd posted this, dated February 8, 2023, which I found on their Yahoo Finance page for COPHF...
What is worthy of note... the reason I'm revisiting it today... First, these are EARLY results... not a report on the findings of a completed study, so, obviously requires "caution" if not "a grain of salt" in our current consideration.
But, the nature of the results they discuss, and the numbers associated with them... ? Worth noting.
Also note that they are addressing the SAME issue in PTSD and depression related issues as BNOX... a 4X since late September... which I'm also following, from just under $4 on Oct 3... if still with an incomplete in the DD requirement, but, it appears "generally positive enough" in that they have completed Phase II, reported positive results, and have a deal for $ with Merck...
But, the "early" results from 5 of 20 patients in the Halucenex study... blows BNOX results out of the water. The caveat is on the characterization of the observations at this still far too early stage. I've seen others give massively positive indications in early trial results... and still fail to meet end points for "technical" reasons other than a real lack of efficacy. And, then, the big $ game gets played... with those "almost the best" candidates that "missed it by that much"... often ending up as "adjuvants" in the formulation of some competitors product... it occasionally appearing that the end points were intentionally designed to ensure "a miss" even while results are actually proving utility in that indication (as perhaps at BNOX in anxiety)... or, would, if the end points had been selected properly. But, no well funded and well heeled or VC backed company management would ever use public market shareholders $ and then throw the public market shareholders under the bus for a bit of Backsheesh, right ? Not even if the VC did a "farm team" deal with the major... to eliminate competitive risks for them... by moving the goal posts to ensure a miss ? Nah. That'd never happen. /s
BNOX ends up "better than" the existing options that Halucenex discusses as "conventional treatments for anxiety and depression are only around 20-30% effective"... with BNOX offering an improvement (from memory... need to check that) of around 20% over that... so, maybe 35% or more effective... versus Halucenex reporting a 2X improvement in efficacy scores... at 50 to ~60% ? Although, note... that's with 1 of 5 apparently not responding, and 4 of 5 giving - "80% of participants experiencing total remission from PTSD symptoms following two doses of Halucenex’s 100%-owned synthetic psilocybin aqueous solution Lucenex"...
So, it appears there may be an issue... not in the efficacy of the drug... but, either, in the definition of the target patient population... some mis-diagnosis... or some multi-factoral element in "some respond and some don't"... Those things aren't really a huge problem... but, do impose a bias in the results that undercuts the nature and degree of the success observed in it doing what it does for those 4 out of 5 ?
So, obviously, that's my key point of interest in PLSH...
Note in that presentation what they show of "the team"... some fairly well heeled and accomplished participants... which still somehow resulted in PLSH owning these two subsidiaries, instead of Meloidiol, within a couple months after they acquired them ?
So, the DD required... probably has three key focal elements. A first in "basic survival" potential... is PLSH capable of making it, or likely going to make it ? A second in... "management, management, management"... in BOTH that aspect of 1.) "basic survival" and "making it" or not... given they are really focused on competing as a consumer health and wellness products manufacturer and distributor... and 2.) "capable of doing what it takes" to bring the Halucenex Phase II trial to a proper conclusion... either by funding internally, or finding the right investors, or the right partners, to put that project on a solid footing.
The rest in 3.) management at Halucenex having both the skills, experience, ability, and the "laser focus" paired with the support required to herd it to a successful conclusion... in Phase II... and the ability to move it from there into a Phase III ?
The risks in PLSH appear more about the "pinkness" factor than the element of probability in the Phase II.
Interesting that PLSH has done... almost exactly nothing... to address the apparent value in hand in the Halucenex acquisition ? Maybe not a good sign that Meloidiol did more than Panace is doing to address its obvious value ? PLSH is continuing their acquisition spree... read their "about" statement at the bottom of the PR... and it appears their highest aspiration is to be a reseller of natural products.
Maybe that business, if is succeeds... provides some downside risk protection in PLSH, if you only value the Halucenex component... but, the same "focus" issue is as likely to ensure a lack of progress in what matters most in the potential value of the pick ? That's just not generating a very inspiring vision of the potential for the parent of what is... or what needs to be... a Pharma company...
They could easily enough solve that by spinning it out... and making Halucenex a stand alone... but, do they care about it enough to bother doing that... or, to bother spending $ on doing that... instead of using what they have in buying another 5 boutique stores to sell lotions ?
BNOX has a $35 million market cap... apparently with more than that potentially coming to them from Merck... while PLSH owns the rights to a potentially much better headline product than BNOX has... has a $5 million market cap... and is ignoring the value in the potential that exists... that, IF it is properly managed... is easily worth a lot more than the rest of the company ?
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