News was out on ACTC yesterday post close, and the market doesn’t quite no what to make of it.
ACTC announced it had come to an agreement in principle with WiCell- a subsidiary of the University of Wisconsin’s alumni research foundation.
The WiCell Research Institute is the national stem cell bank for the fetal stem cell line which President Bush so generously allowed to continue to exist when he set his precedent for federal funding of stem cell research back in 2001. I believe there were 11 fetal stem cell lines in existence at that time.
The press release states the following: “Provided that the federal government is willing to fund future human embryonic stem cell research where it can be demonstrated that the embryo was not harmed, we will do our part in scaling up many new lines under Good Manufacturing Processes (GMP) guidelines and making such lines available,” stated William M. Caldwell, IV., Chief Executive Officer of Advanced Cell Technology.”
Of course, there’s the rub. That statement is interesting. The company is saying it will work towards proving out that their technique for creating fetal stem cells falls under President Bush’s guidelines. If interpreted verbatim, it means the company needs to deliver a study showing it can remove one cell from an eight cell entity, and that cell can become an egg from which a healthy baby can be born.
Even if they prove this to be true there will be ultra conservative detractors who believe that removal of that one cell alters life.
If ACTC can demonstrate it has the technology, the door will open. They announced today they have teamed up with the stem cell bank that all researchers currently use for fetal stem cells.
If they can jump through this hoop, they could be generating very significant revenues from selling fetal stem cell lines to other research bodies long before any therapies are available to US citizens.
What strikes me about this chart is the volume decline. Albeit off a huge number, the volume has been quieting down significantly over the last two weeks.
What does this mean to investors?- it means the stock has finally found a level it likes, and you can now accumulate the stock without worrying about the downside.
Accumulate while it is quiet. That’s the key to being a good microcap investor. Wait for the next event to push the stock higher. That’s the key.
Comments and questions are welcome. Remember, your comments won’t show up until I respond.
Hi
I enjoy and value reading your posts and love your website, i check in 2-3 times a week. What is your take on the likelyhood of more “toxic” finacing for ACTC? Also, it seems a good bet that any change in office in November could likely drive the pps higher…an idea touched on in the latest IBD article…do you think we will see significant speculation on nov elections in the coming weeks ? I just initiated my first position in ACTC late on friday at .6802 a share, hoping that i could buy against some end of quarter selling pressure…..
Keep up the good work.
Jeff
Editor: Good question. They are now good for another year, so it’s not too much of a concern for the time being. However, they will do what they have to do to keep the treasury full. As their technology develops, they will be able to go to less aggressive financiers for funding. I deeply believe most people are very much in favor of Stem Cell research, so the political climate, by extension, should yield a better financing climate. The short answer: I would say at this time it is 50/50 they won’t have to do any more toxic financing, but it is basically 100% they will need to raise more money at some point in the future. Â
The company i tell you : Immune response corp.(IMNR.OB).
Editor: While IMNR is one heck of a great speculation at its current price, it is not a Stem Cell company. Totally different category of biotech, but further along in the clinic than Advanced Cell.
WOW! What happened today at 1:00PM? I don’t see any news that would make it jump this much. Over 7 million shares traded!
Regis
Editor: The CEO made an appearance on CNBC’s Power Lunch mid day show. That’s the kind of exposure you can get with this stock.
Incredible day in ACTC today. Up 38%!! Beyond the speech, can’t find any news. Do you have any insights?
BD
Editor: CEO was on Power Lunch on CNBC. Sell it and buy it back lower.
I saw on 1/26 ACT registered 33 mil more shares. Is there any mathmatical way to determine how this will effect current share price? Also, why have you decided to do limited coverage on ACTC ??
Another loyal reader:
Jef
Editor: Yes- the selling shareholders are all the same guys who did the original $18 million financing. These are probably more shares that had to be registered. I don’t think it effects the upside in the longer term. I don’t publish on it much because it’s simply a long term hold on the Stem Cell space. They have great science and get a lot of ink. Just take your chances. Don’t try to trade this one unless it gets really cheap.
Any Idea what the catalyst for the volume spike this week ? It seems to me traders are speculation on positive news covering the stem cell vote this week. There was also an interesting article in the washington times
http://www.washingtontimes.com/business/...
What can we expect in the coming week ? What do you think of the chart ?
Hope all is well.
Jeff K
Editor: I would love to see it trade above $.90 to be a believer that there is a potential breakout here. Volume is up, although not significantly. Here’s the key with this one- what level are they raising money at? These biotechs tend to be huge cash gobblers, and when they start running low on money they just raise more- no matter what the price. If they can limit the supply for a while, this one has a chance of challenging $2 again in a more favorable climate for Stem Cell companies. These guys have some of the most interesting technology on that arena there is.