Email : info@otcjournal.com
URL : http://www.otcjournal.com
To
OTC Journal Members:
 |
Sir Thomas More
and Diomed (AMEX: DIO): A Man and A Stock For All Seasons |
|
Our inbox has been filled with requests
for information on the state of Diomed. One of our profiled companies
in 2002, this idea has been a disaster. As the stock continues its slow,
painful daily descent to death falling into the $1 range, we cannot help
but be reminded of one of history's greatest individual stories of personal
character.
A Man For All Seasons
is one of the greatest plays ever written. In the play, author Robert Bolt
relates the historical story of the relationship between Sir Thomas
More and King Henry the VIII.
In year 1529, King Henry attempted
to divorce then queen Catherine of Aragon who had been unable to provide
him with the son he so desperately wanted. The Pope refused Henry's repeated
requests for a divorce.
Henry boldly declared himself head
of both the Church of England and state in 1531. He granted himself a divorce,
which allowed him to marry Anne Boleyn and pursue his quest to create an
heir to the throne.
Sir Thomas More, then Lord
Chancellor of the Realm and very popular figure, remained silent on the
issue. He would not come out in support of Henry's move, infuriating the
King.
In 1534, Parliament passed a bill
requiring all subjects to take an oath acknowledging the supremacy of England's
king over all foreign sovereigns - including the Pope. The deeply religious
More
made every effort to skirt the issue by choosing to remain silent on the
subject of the divorce while he tried to keep his loyalty to Henry
from coming into question.
Sir Thomas More was eventually
convicted as a traitor to England, and in 1535 was executed
in the infamous Tower of London. He died for his principles.
 |
Diomed
(AMEX: DIO) (Or Should We Say Dio-Death) Like Sir Thomas More- Silence
Equals Death |
 |
The management of Diomed is
successfully repeating the history of Sir Thomas More with its refusal
to provide shareholders with any updated information on the roll out of
its revolutionary new EVLT (endovenous laser treatment) for varicose veins.
If the company can successfully attain
a 10% market share from the current inferior and highly invasive stripping
procedure, it could translate into $50 million in annual sales and significant
profits for the company.
Since commencing sales this past
March, shareholders have pathetically been treated to public disclosure
that it has sold two lasers for this treatment back in the early going.
Since then, no additional information as to the status of the commercial
roll out has been forthcoming from the company.
Diomed filed a registration
statement with the SEC on behalf of private placement investors this past
June, and as a result management maintains the company is in a regulatory
"quiet period" until the aforementioned registration statement is declared
effective.
Like Sir Thomas More, the
adoption of this silent policy is leading to the slow, torturous death
of the stock. The scene is being played out on the floor of the American
Stock Exchange, rather than the courts of medieval England and the Tower
of London.
When shares of Diomed made
their debut this past February, investors were excited about the prospects
for EVLT, and bid the stock up to a high of $9 in short order. Since that
time, much to the chagrin of investors, the company has been mute about
its progress, and the stock has remained under consistent pressure on light
volume. There are simply no buyers, and the company is giving no one any
reason to buy. With the Biotech index hitting 5 year lows, shareholders
are throwing in the towel on this loser.
|
Conclusion |
|
June quarterly financial performance
must be reported by the company to the SEC before August 15th. This quarterly
filing will be the first public measure of the company's success in rolling
out EVLT. By the time we see the report it will be old news. We will already
be halfway through the 3rd quarter, but it should provide us with some
insight into the company's potential for growth.
The good news- Investors have
no tolerance for risk. The company's silence is being interpreted as failure.
Complete failure of the EVLT roll out is already priced into the stock.
Therefore, any indication the company is having success selling the EVLT
product could lead to the beginning of a rebound in the stock.
The company's current state could
run the gamut from roaring success to complete failure.
If you haven't sold already it probably
makes no sense to do so now. In all likelihood, the company is not doing
as poorly as the stock would lead us to believe by its pathetic performance.
On the other hand, until the company
removes its head from the sand and begins communicating with its shareholders,
we see no reason to add to a position or establish a new one. Just wait
it out and wait for facts to make an intelligent and informed decision.
When the company issues its June
quarterly financial results we will publish our thoughts. Until then, we
will keep both feet firmly planted in the air.
In the event the company is succeeding,
there could be substantial short term appreciation in the stock from current
levels. A 100% snap back could be possible from this grossly oversold condition.
Sir Thomas More is viewed
as one of the greatest individuals in history; a man who was willing to
die for his principals. Diomed also seems willing to die for it's
ultra conservative regulatory stance on disclosure, but it's death is killing
all of the shareholders along with it.
Charts Provided Courtesy
Of TradePortal.com
The OTC Journal is
a proud partner of the SwingWire.com
Online Investment Community. A next generation Online Analyst Exchange
providing Members the ability to search, review, track and monitor some
of the Internet's best Online CAs (CyberAnalysts). Members
have the opportunity to potentially achieve higher
returns by viewing top performing portfolios
and receiving real-time alerts from favorite CAs.
SwingWire.com
also has a lucrative incentive model for experienced investors and traders
who consistently outperform the market. Share market ideas with other like-minded
investors, establish a proven track record, provide insightful commentary,
attract followers and ultimately become one of the Internet's highest paid
and most sought after CyberAnalysts!
Click
here to receive your FREE 30-Day Trial Membership with no further obligation.
Sign Up Today!
|
