Shares of Neptune Technologies Bioressources (NEPT) are down 19% and falling today, as the biotech company continues to suffer from the effects of a devastating fire at its production plant in early November. Notwithstanding the human cost, the fire destroyed Neptune’s only plant and product stores. Shares are now down 45% from its Nov. 7 close, the day before the fire.
Over at Seeking Alpha, Richard Pearson has an incredibly thorough and incredibly negative takedown of the stock. Referencing a deal that removed biotech royalties in exchange for equity in Acasti Pharma, Pearson writes:
With no near-term revenue prospects from either krill oil or Acasti, Neptune’s ability to survive as a company is highly questionable. The $150 million market cap company has no factory, no product, no revenue and only ten employees. Meaningful production will be unable to begin until 2014, and even that is subject to a government investigation into the explosion, which has already produced two non-compliance letters to Neptune.
Following a recent equity offering which raised $31 million in proceeds, Neptune now has $0.70 per share in cash and no revenue producing assets remaining.
Meanwhile the current share price of Neptune remains at $2.44, which is just in line with where it traded in early 2012, when Neptune was fully operational and growing revenue.
One of Pearson’s more remarkable pieces of data is that 81% of Neptune’s shares are currently held by retail investors (FactSet data says 27% of the company is held by institutional investors). A big chunk retail holders suggests the wild swings we’re seeing today may not be a one-off; in the worse case, of course, the company’s grim situation may portend a continuing slide for the stock.
No comments:
Post a Comment