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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Bioseek | ATD | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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| 0.00 | 0.00% | 0.50 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 0.50 | 0.50 |
| Top Posts |
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Posted at 20/8/2012 16:48 by buywell2 BioSeek(Asterand) win again............. % Losers Top Lists ................... EPIC............. Name .......... % .. ATD......... Bioseek....... -19% .. MTV........ Motive Tv...... -18% .. TPJ...... Triple PL.JU..... -16% Another buying opportunity presents itself for our savvy investor that has been adding prior to delisting |
Posted at 27/7/2012 17:46 by buywell2 So it's you Skipper that bought at 0.75p the other day and at 0.5p today 33% cheaper .... there is still around 0.5m left you can snaffle on monday for the same 33% discount.buywell2 14 Jul'12 - 13:09 - 846 of 870 edit Following the RNS at 13:00 hrs on friday it would seem investors now have a choice The 'A' word = ROCK 'Whilst the Board is confident that it can reach the necessary agreement with its professional advisers, there can be no guarantee that this will be the case and as at the date of the Circular there are no legally binding agreements in place. In the event that the Company cannot reach an agreement to defer a minimum of approximately USD618,000 of professional fees, it is likely that the Company will be placed into administration.' or Dilution = HARD PLACE 'If, following the Cancellation, the Company raises additional funds through further issuances of equity or convertible debt securities, existing Shareholders could suffer significant dilution. Your attention is drawn to Part II (Risk Factors) of the Circular.' I previously pointed out that DEBT was still exceeding cash after the disposal and with staff and BOD costs the company had a major problem continuing as a going concern. From the RNS on friday 17. WORKING CAPITAL STATEMENT In the opinion of the Company, the Continuing Group does not have sufficient working capital for its present requirements, being the next 12 months from the date of the Circular. Immediately on Completion, the Continuing Group will have a cash balance of approximately USD11,024,000, including the proceeds from the Disposal of USD9,000,000. Against this are immediate liabilities of approximately USD11,156,000, being the Secured Debt of approximately USD9,067,000 (which will be paid on Completion), outstanding professional fees relating to the Disposal of approximately USD1,128,000 and other creditors of approximately USD961,000. Thus there is an immediate funding requirement of approximately USD132,000. In the next 12 months from the date of the Circular the Continuing Group has a maximum funding shortfall of approximately USD618,000 which falls in September 2012. If the Cancellation Resolution is not passed, the Continuing Group will have an additional annual working capital requirement of approximately USD1,043,000 which represents the annual costs of maintaining the listing (further details of which are set out in paragraph 10 of this Appendix I), the effect of which in the current year would be to increase this maximum working capital requirement by approximately USD175,000 to an estimated USD793,000 in September 2012. The Continuing Group will not be in a position, following Completion, to settle all its liabilities as they fall due and is dependent on the forbearance of some its major creditors to continue trading. The Board is in advanced discussions with certain of the professional advisers to defer USD770,000 of professional fees until either the Continuing Group receives a tax refund of approximately USD1,100,000, which is due to be received in April 2013, or until BioSeek is either refinanced or sold. Whilst the Board is confident that it can reach the necessary agreement with its professional advisers, there can be no guarantee that this will be the case and as at the date of the Circular there are no legally binding agreements in place. In the event that the Company cannot reach an agreement to defer a minimum of approximately USD618,000 of professional fees, it is likely that the Company will be placed into administration. It should be noted that there can be no certainty that the expected tax refund will be received in April 2013 or that any of the existing liabilities can be deferred and your attention is therefore drawn to Part II (Risk Factors) of the Circular. The Board is also considering the possibility of a fundraising, through either debt or equity, or a disposal of BioSeek or the BioSeek Business. However, without a deferment of certain creditors, the Board believes that it is unlikely that there will be sufficient time for these options to be successfully concluded. Furthermore, the Board believes that there are limited funding options available to the Continuing Group in the UK, and that potential US funders would have a preference for investing in an unlisted group which does not have the costs associated with maintaining a listing. Therefore, whilst the Board cannot be certain that it will be able to raise funds even if the USD770,000 is deferred, it believes that it is more likely to be able to do so if the Cancellation Resolution is approved by Shareholders. In the event that a buyer is found for BioSeek or the BioSeek Business, it is the Board's intention to wind up the remaining group and distribute any surplus funds to Shareholders. In summary, if the Disposal Resolutions are not passed, it is likely that the Company will be placed immediately into administration. If the Disposal Resolutions are passed, in order to avoid being placed into administration the Continuing Group will need to defer certain liabilities on Completion to provide time either to: 1. trade through until the earlier of the tax refund is received, which is expected in April 2013, or until such time as the Continuing Group is generating sufficient cash to repay such liabilities; 2. raise funds; or 3. dispose of BioSeek or the BioSeek Business. In the event that a minimum of approximately USD618,000 of liabilities and the estimated USD175,000 of pro rata listing costs (in the event of the Cancellation Resolution not being passed) can be deferred until April 2013, the Continuing Group expects to be able to settle its liabilities from its operational cash flows. Your attention is drawn to paragraph 18 of the Circular and this Appendix I which contains the recommendation from the Board and the importance of the vote. For further implications of the Disposal and/or the Cancellation not being approved by Shareholders or the action plan outlined above being unsuccessful you are referred to Part II (Risk Factors) of the Circular. spaceparallax 14 Jul'12 - 14:39 - 847 of 870 Yawn buywell2 15 Jul'12 - 08:13 - 848 of 870 edit From the RNS 'The Directors would like to draw Shareholders attention to the qualified working capital statement contained in paragraph 17 of Appendix I below and of the Circular which shows a material difference in the maximum working capital requirement to that which was announced by the Company on 11 June 2012. ' What a bunch ..... They are going to de-list on 29th August to save money .... because they have more debts than cash 'Under the Listing Rules, a de-listing can be effected by a company after securing a special resolution (requiring at least 75 per cent. approval of those shareholders who vote) in general meeting and the expiration of a period of not less than 20 business days from the date of the shareholder approval. The Board proposes to make application as soon as possible for the Cancellation to be effected. Accordingly, subject to the passing of the Cancellation Resolution, it is anticipated that the date of the Cancellation will be at 8 a.m. on 29 August 2012. ' These are the consequenses for existing shareholders after they de-list Following the Cancellation, although the Ordinary Shares will remain transferable they will no longer be tradable on the Official List and no other trading facility will be available to enable the trading of the Ordinary Shares. Consequently, there can be no guarantee that following the Cancellation a Shareholder will be able to purchase or sell any Ordinary Shares. Shareholders should also note that following the Cancellation: (a) the Company may not remain subject to the Takeover Code as the Company's place of central management and control is outside of the UK and its shares will no longer be traded on a regulated market in the United Kingdom. The Company's minority Shareholders will therefore no longer benefit from the protections afforded to them by the Takeover Code. However, if in the future the Takeover Panel determines that the Company's place of central management and control is in the UK, the Takeover Code would again apply to the Company; (b) the Company will not be bound to announce material events, administrative changes or material transactions or to announce interim or final results; (c) the Company will no longer be required to comply with any of the regulatory requirements applicable to companies admitted to the Official List and to trading on the Main Market of the London Stock Exchange. For example, transactions with related parties or which are of a certain size will no longer require prior Shareholder approval (as is required under the Listing Rules); (d) the Company will no longer be subject to the Disclosure and Transparency Rules and Shareholders will no longer be required to disclose major shareholdings in the Company and the announcement by the Company of those disclosures will no longer be required; and (e) the Company will no longer be subject to the Model Code or the UK Corporate Governance Code. The Cancellation might also have either positive or negative taxation consequences for Shareholders (for example, once the Cancellation has become effective, the Ordinary Shares would no longer be a qualifying investment for an ISA). If Shareholders are, however, in any doubt about their own tax position, they should consult a professional adviser immediately. ' buywell2 15 Jul'12 - 08:50 - 849 of 870 edit .................... In the RNS it states 14.2. The Company has received irrevocable undertakings from the following Shareholders to vote in favour of all of the Resolutions except for Resolutions no.3 and no.6 (being the Resolution which if approved would allow the Company to communicate with Shareholders electronically and the Change of Name Resolution) set out in the notice of General Meeting: Number of Percentage of Ordinary Shares issued Shareholder Ordinary Shares Oxford Bioscience Partners 26,570,325 22.38 Chrysalis Ventures II LP 15,735,457 13.25 Hale Fund I LLC 6,343,089 5.34 Arboretum Ventures LLC 4,903,676 4.13 Fort Washington Private Equity Investors II LP 4,846,346 4.08 Amherst Fund LLC 525,000 0.44 Total 58,923,893 49.65 From the above 49.65% have already voted AGAINST the change of name from Asterand to Bioseek My guess is that they don't want Bioseek then to be refinanced by NEW American money which would effectively render their 49.65% holding worth circa 5% or less of what it is now. BUT In the RNS it says '12. Change of Name Included within the assets of the Human Tissue Business sold to the Buyers under the Disposal Agreement is the right to the "Asterand" name. It is therefore necessary for the Company to adopt a new corporate name from Completion. Accordingly, the Change of Name Resolution, which is conditional on the Resolution approving the Disposal being passed, proposes to change the name of the Company to "BioSeek plc". This also reflects the fact that the Continuing Group will consist of the BioSeek Business only.' BUT 49.65% of shareholders have VOTED AGAINST the name change to Bioseek So are the existing shareholders FORCING the BOD out of the way and want the administrator to deal with the sale of the entire business ? Seems that way to me spaceparallax 16 Jul'12 - 09:53 - 850 of 870 yawn |
Posted at 15/7/2012 08:50 by buywell2 ....................In the RNS it states 14.2. The Company has received irrevocable undertakings from the following Shareholders to vote in favour of all of the Resolutions except for Resolutions no.3 and no.6 (being the Resolution which if approved would allow the Company to communicate with Shareholders electronically and the Change of Name Resolution) set out in the notice of General Meeting: Number of Percentage of Ordinary Shares issued Shareholder Ordinary Shares Oxford Bioscience Partners 26,570,325 22.38 Chrysalis Ventures II LP 15,735,457 13.25 Hale Fund I LLC 6,343,089 5.34 Arboretum Ventures LLC 4,903,676 4.13 Fort Washington Private Equity Investors II LP 4,846,346 4.08 Amherst Fund LLC 525,000 0.44 Total 58,923,893 49.65 From the above 49.65% have already voted AGAINST the change of name from Asterand to Bioseek My guess is that they don't want Bioseek then to be refinanced by NEW American money which would effectively render their 49.65% holding worth circa 5% or less of what it is now. BUT In the RNS it says '12. Change of Name Included within the assets of the Human Tissue Business sold to the Buyers under the Disposal Agreement is the right to the "Asterand" name. It is therefore necessary for the Company to adopt a new corporate name from Completion. Accordingly, the Change of Name Resolution, which is conditional on the Resolution approving the Disposal being passed, proposes to change the name of the Company to "BioSeek plc". This also reflects the fact that the Continuing Group will consist of the BioSeek Business only.' BUT 49.65% of shareholders have VOTED AGAINST the name change to Bioseek So are the existing shareholders FORCING the BOD out of the way and want the administrator to deal with the sale of the entire business ? Seems that way to me |
Posted at 14/7/2012 13:09 by buywell2 Following the RNS at 13:00 hrs on friday it would seem investors now have a choiceThe 'A' word = ROCK 'Whilst the Board is confident that it can reach the necessary agreement with its professional advisers, there can be no guarantee that this will be the case and as at the date of the Circular there are no legally binding agreements in place. In the event that the Company cannot reach an agreement to defer a minimum of approximately USD618,000 of professional fees, it is likely that the Company will be placed into administration.' or Dilution = HARD PLACE 'If, following the Cancellation, the Company raises additional funds through further issuances of equity or convertible debt securities, existing Shareholders could suffer significant dilution. Your attention is drawn to Part II (Risk Factors) of the Circular.' I previously pointed out that DEBT was still exceeding cash after the disposal and with staff and BOD costs the company had a major problem continuing as a going concern. From the RNS on friday 17. WORKING CAPITAL STATEMENT In the opinion of the Company, the Continuing Group does not have sufficient working capital for its present requirements, being the next 12 months from the date of the Circular. Immediately on Completion, the Continuing Group will have a cash balance of approximately USD11,024,000, including the proceeds from the Disposal of USD9,000,000. Against this are immediate liabilities of approximately USD11,156,000, being the Secured Debt of approximately USD9,067,000 (which will be paid on Completion), outstanding professional fees relating to the Disposal of approximately USD1,128,000 and other creditors of approximately USD961,000. Thus there is an immediate funding requirement of approximately USD132,000. In the next 12 months from the date of the Circular the Continuing Group has a maximum funding shortfall of approximately USD618,000 which falls in September 2012. If the Cancellation Resolution is not passed, the Continuing Group will have an additional annual working capital requirement of approximately USD1,043,000 which represents the annual costs of maintaining the listing (further details of which are set out in paragraph 10 of this Appendix I), the effect of which in the current year would be to increase this maximum working capital requirement by approximately USD175,000 to an estimated USD793,000 in September 2012. The Continuing Group will not be in a position, following Completion, to settle all its liabilities as they fall due and is dependent on the forbearance of some its major creditors to continue trading. The Board is in advanced discussions with certain of the professional advisers to defer USD770,000 of professional fees until either the Continuing Group receives a tax refund of approximately USD1,100,000, which is due to be received in April 2013, or until BioSeek is either refinanced or sold. Whilst the Board is confident that it can reach the necessary agreement with its professional advisers, there can be no guarantee that this will be the case and as at the date of the Circular there are no legally binding agreements in place. In the event that the Company cannot reach an agreement to defer a minimum of approximately USD618,000 of professional fees, it is likely that the Company will be placed into administration. It should be noted that there can be no certainty that the expected tax refund will be received in April 2013 or that any of the existing liabilities can be deferred and your attention is therefore drawn to Part II (Risk Factors) of the Circular. The Board is also considering the possibility of a fundraising, through either debt or equity, or a disposal of BioSeek or the BioSeek Business. However, without a deferment of certain creditors, the Board believes that it is unlikely that there will be sufficient time for these options to be successfully concluded. Furthermore, the Board believes that there are limited funding options available to the Continuing Group in the UK, and that potential US funders would have a preference for investing in an unlisted group which does not have the costs associated with maintaining a listing. Therefore, whilst the Board cannot be certain that it will be able to raise funds even if the USD770,000 is deferred, it believes that it is more likely to be able to do so if the Cancellation Resolution is approved by Shareholders. In the event that a buyer is found for BioSeek or the BioSeek Business, it is the Board's intention to wind up the remaining group and distribute any surplus funds to Shareholders. In summary, if the Disposal Resolutions are not passed, it is likely that the Company will be placed immediately into administration. If the Disposal Resolutions are passed, in order to avoid being placed into administration the Continuing Group will need to defer certain liabilities on Completion to provide time either to: 1. trade through until the earlier of the tax refund is received, which is expected in April 2013, or until such time as the Continuing Group is generating sufficient cash to repay such liabilities; 2. raise funds; or 3. dispose of BioSeek or the BioSeek Business. In the event that a minimum of approximately USD618,000 of liabilities and the estimated USD175,000 of pro rata listing costs (in the event of the Cancellation Resolution not being passed) can be deferred until April 2013, the Continuing Group expects to be able to settle its liabilities from its operational cash flows. Your attention is drawn to paragraph 18 of the Circular and this Appendix I which contains the recommendation from the Board and the importance of the vote. For further implications of the Disposal and/or the Cancellation not being approved by Shareholders or the action plan outlined above being unsuccessful you are referred to Part II (Risk Factors) of the Circular. |
Posted at 18/5/2012 09:26 by buywell2 Do you own shares in this POS space ?This company has breached it's banking covenants It has no future as a continuing business Staff will have left/be leaving to find jobs No new clients will be signing contracts for work which will never get done Debts will be mounting It's future is measured in weeks at best A weekly update is the absolute least this pathetic BOD could provide the investors they have left .... they have failed miserably Funny enough this share will now probably hit the advfn risers board as from just over a penny 1.25p a 0.5p jump equates to circa 40% rise approx .... bit like Plus Market |
Posted at 15/3/2012 15:27 by buywell2 what deal is that ?thus far all we read is about talks which have dragged on or ended I think ATD will get broken up into bits Can´t see any one company taking on the whole , also after poor results any prospective bit buyer will be able to bargain harder with the administrator , hence the delay I think. Mind you .... we might not get results .... has anyone heard yet ? After all there was some doubt as to the ability of ATD to continue trading 31 August 2011 12:48 Inability to meet demand takes Asterand to the brink Author // Lautaro VargasPosted in // Medtech 8 -------------------- Asterand today revealed the extent of its financial problems: crippled by its inability to meet customer demand for its human tissue services, the Cambridge biotech needs to raise new financing if it is to avoid defaulting on its debts and continue as a going concern. On a day that Asterand CFO, John Stchur followed the lead of former CEO Martyn Coombs and stepped down, the company's interim results said that a combination of poor trading and repayment of the debt used to acquire BioSeek will result in a breach of banking covenants. In words that sent a chill through investors and precipitated a huge sell off of stock, taking the share price down by over 54 per cent, Asterand's interim statement said there was: "a material uncertainty that casts significant doubt upon the Group's ability to continue as a going concern." BioSeek, the provider of human disease models purchased by Asterand at the beginning of 2010 for a valuation that is now at $9.5m, has single-handed grown revenues for the group which actually saw revenues climb 36 per cent to $11.9m (H1 2010: $8.7m) in H1 2011. However, its acquisition has also led Asterand to take on $9.3m in debt. Meanwhile, the rest of the business - the human tissue based solutions - has been flat, bringing expectations down below previous forecasts. Chairman and interim-CEO, Jack Davis says demand for these products and services remains high, however meeting these needs has been challenging, resulting in a retraction in the non-BioSeek revenues, including the anticipated revenues under the $24.3m NCI contract. Davis, said that following discussions with potential investors there was a reasonable expectation that sufficient funds will be raised within an appropriate time-frame to continue operating as a going concern and provide enough working capital headroom to fund improved tissue sourcing strategies, however, there is no guarantee of shareholder approval for a deal. The board is also reviewing its listing on the premium section of the London Stock Exchange, the costs of which may now be too high. From the following it looks like BioSeek revenues have levelled off .... not good RNS Number : 3316S Asterand PLC 18 November 2011 For Immediate Release 18 November 2011 Asterand plc ("Asterand" or the "Group") INTERIM MANAGEMENT STATEMENT Asterand plc (LSE: ATD), a leading provider of human tissue and human tissue-based services to pharmaceutical and biotechnology companies engaged in drug discovery research, today issues its Interim Management Statement. In the Company's Interim Results statement on 31 August 2011, Asterand announced that volatile trading conditions had led to a reduced outlook for the year and that further funding would be required as the Company was in breach of its banking covenants. After a downturn in the Tissue business during the third quarter, trading conditions have improved and the Company now expects Tissue revenues to be in line with 2010. BioSeek has consolidated its trading in the second half to date after achieving strong growth in the first half. Overall, the Company continues to expect that Group revenues for the full year ended 31 December 2011 should exceed 2010. Whilst the Company is encouraged with the upturn in the operational performance, the balance sheet remains an issue that needs to be resolved. The Company previously announced that events of default had occurred in respect of both the Silicon Valley Bank debt and the loan notes with former BioSeek shareholders. These debts amount to approximately US$9m in aggregate. The need to settle these notes led the Board to look first at a re-financing of the Group and then to commence, on 24 October 2011, a formal sale process. The Board's initial estimates of the cash available to the Company have been reviewed and in light of both the upturn in trading and improvements in cash collection and working capital control, the Board now believes that it has sufficient working capital to continue into the early part of 2012. As a consequence, the Company has extended the timeframe for the formal sales process and continues to evaluate the options of either a sale of the business or a re-financing. As well as experiencing challenging trading conditions since 30 June 2011, the Company has also experienced management changes with both the CEO, Martyn Coombs, and the CFO, John Stchur, leaving the Company. Alan Fishman was appointed as Interim CFO with Jack Davis, the Company's Chairman, taking on the role of Interim CEO. Discussions regarding the appointment of a new CEO have been suspended for the period of the formal sale process. Jack Davis, Asterand Chairman and Interim CEO, commented: "The second half of 2011 has been a turbulent one for the Company. Asterand started the year with high expectations only to experience volatile trading in the first half which adversely impacted certain key financing arrangements and a weakening of our balance sheet. Whilst the expected increase in revenues for the final quarter has improved the general outlook, our balance sheet issues continue to dominate the actions of the Company." A re-financing IF IT HAPPENS might be at a discount of circa 50% of the SP My guess would be they need to raise around 15m USD with over 9m debt and money needed to improve offerings, and this could be at circa 1.5p to get investors interested Chart seems to indicate a return to somewhere between the blue lines dyor |
Posted at 02/8/2011 13:23 by emuphil If the CEO has been turfed out as you're assuming, why has another one not been lined up? Seems to me he has left of his own accord the question has to be asked why.Regarding the company performance there are inside and outside influences as always, and any investor who expects a company to continually raise profits every year regardless of external forces is likely to be disappointed. A company like ATD requires a long term view. Investors entering in at 27p after ATD was the best performer on the main market, expecting further immediate gains, were of course disappointed, and I don't think think the BOD can be blamed for this. ATD were 6p when I bought in and are 9.5p so actually over any reasonable time period investors should be pleased, and investors entering now and being prepared to be patient can expect good gains in my opinion. In a backdrop of market turmoil and decreasing pharma spending the company has held the core business relatively flat by seeking and finding alternative customers, and made a decent acquisition that on it's own is increasing the t/o of the company by 30% so far this year on last. This doesn't seem to me to be a bad place to be, but I think sentiment is against them at the moment, and the departure of the CEO under undisclosed circumstances hasn't helped. |
Posted at 01/8/2011 16:54 by petersinthemarket It doesn't take an expert chartist to see that the BoD has presided over two lengthy and absolutely disasterous share price slides in two years and we are now just about to beat the lowest low of one year ago. I am sure this is a terrible disappointment to the BoD, as well as investors. Many people (including myself)thought earlier this year that we were at last seeing a genuine turnaround developing. However published results tell a very different story. There is not enough main stream growth in atd to generate confidence in the mind of investors and atd's books do not demonstrate an effective management of resources. To offer at least one slightly more generous note, there is perhaps some excuse at present as all markets are flat or falling. Gold is at a high and ordinary investors are pulling out of many stocks in fear of some sort of global flatlining or even a medium/long term slide into even lower territory. But IMHO this does not excuse the BoD at atd. Whilst not quite a unique product they do nonetheless have an excellent product line with few equals but have not managed to capitalise on it. If there is any blame to level for this situation, why should it not be the responsibility of the BoD? Perhaps a new man at the top will help but he will take some time to bed in. atd are in danger of making a habit of disappointing. Investors bitten twice (like me) will leave them to it and will not consider returning until the BoD can convince them that they know exactly how to position the company in the market place, drive up margins, and produce consistant improvements in eps. It is eps which ultimately drives the share price. We are in this to make money, aren't we? best of luck to all. pim |
Posted at 13/5/2011 00:51 by buywell2 ''I now fear that Asterand's prospects for 2011 are poor and have substantially reduced my position, at a significant loss. The company continues to offer investors an optimistic view. I hope it succeeds, but now believe that the odds of a near-term price rise are much lower than I thought them to be in January.''I think the chart could see 6p if the downtrend continues in line with previous rate of fall. dyor A tale of two City reactions to news By David Schwartz Published: May 6 2011 17:45 | Last updated: May 6 2011 17:45 T wo trading trends just caught my eye. The FTSE 250 index has out-performed other major UK indices in recent weeks. Also, several shares that I regularly monitor are bouncing up after being slammed by big declines. The combination of these two themes has led me to seek shares within the 250 index that are ripe to rebound after painful declines. A good example is Pace (PIC), the provider of television set-top boxes plus hardware solutions for digital and interactive services. Its shares fell sharply in March after 2010 results were released. Investors were spooked by what seemed to be an order cancellation from a large customer as well as its effort to steer City expectations lower for 2011. I was struck by the fact that many analysts believe investors overreacted. They note that the customer merely delayed its order. Another plus is that profit margins are improving. The consensus profit forecast for 2011 is significantly ahead of last year. The graph shows that prices sit near to an important support line. Also, many recent penetrations of the five-week moving average, up or down, were followed by significant continuation moves. Prices now sit close to this line. The company will issue an interim management statement next Thursday. A positive response could lead to a fresh continuation rally. In contrast to my positive thoughts about Pace, my opinion about Asterand (ATD) has significantly deteriorated. The company supplies human tissue for drug research. It recently acquired BioSeek, enabling it to expand into drug compound testing. I was very optimistic about Asterand in January when I wrote about it even though it had lost money in three of the past four years. Its shares had rallied for two months after a year-long decline. The BioSeek acquisition offered considerable profit potential. A recently completed cost-cutting programme was expected to boost profits, as was a huge contract with the US National Cancer Institute. Most important of all, the company was enormously optimistic about its future. But once again, Asterand has disappointed me. It announced in late-March that it would release its 2010 results on April 7. My alarm bells began to ring when on April 5 it suddenly announced a delay. Unexpected last-minute postponements often precede bad news. The company explained that its bank suddenly blocked access to funds that were intended for the former owners of BioSeek, because of a deterioration in trading conditions. I worried that the bank had scented a serious emerging problem. Other investors had similar concerns. Asterand's shares quickly lost one third of their value. New worries emerged when 2010 results were belatedly released. Pre-tax losses were the same as in 2009 in spite of cost-cutting. BioSeek's contribution rose as expected but revenues from the rest of the company fell. Where was the expected revenue and profit improvement? I also worry about the newly-signed US contract. The US faces a huge budget crisis and government contracts are being cancelled, delayed or reduced. We must not ignore this possibility for Asterand. Also, the amount of revenue to be realised from this contract in 2011 is quite small, probably in the $2m-$3m range. Experience teaches me that these shares often surge on news of a big contract and then slump when the contract ends. I fear the current price is supported by the upcoming National Cancer Institute contract. If the US financial crisis hits this, the risk to investors is enormous. Another jarring note was the company's admission last week that it merely aims to break even in the short run, not turn a profit. I now fear that Asterand's prospects for 2011 are poor and have substantially reduced my position, at a significant loss. The company continues to offer investors an optimistic view. I hope it succeeds, but now believe that the odds of a near-term price rise are much lower than I thought them to be in January. Stock market historian David Schwartz is an active short-term trader writing about his own trades. |
Posted at 06/5/2011 18:44 by jamesmaggs Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.cA tale of two City reactions to news By David Schwartz Published: May 6 2011 17:45 | Last updated: May 6 2011 17:45 T wo trading trends just caught my eye. The FTSE 250 index has out-performed other major UK indices in recent weeks. Also, several shares that I regularly monitor are bouncing up after being slammed by big declines. The combination of these two themes has led me to seek shares within the 250 index that are ripe to rebound after painful declines. A good example is Pace (PIC), the provider of television set-top boxes plus hardware solutions for digital and interactive services. Its shares fell sharply in March after 2010 results were released. Investors were spooked by what seemed to be an order cancellation from a large customer as well as its effort to steer City expectations lower for 2011. I was struck by the fact that many analysts believe investors overreacted. They note that the customer merely delayed its order. Another plus is that profit margins are improving. The consensus profit forecast for 2011 is significantly ahead of last year. The graph shows that prices sit near to an important support line. Also, many recent penetrations of the five-week moving average, up or down, were followed by significant continuation moves. Prices now sit close to this line. The company will issue an interim management statement next Thursday. A positive response could lead to a fresh continuation rally. In contrast to my positive thoughts about Pace, my opinion about Asterand (ATD) has significantly deteriorated. The company supplies human tissue for drug research. It recently acquired BioSeek, enabling it to expand into drug compound testing. I was very optimistic about Asterand in January when I wrote about it even though it had lost money in three of the past four years. Its shares had rallied for two months after a year-long decline. The BioSeek acquisition offered considerable profit potential. A recently completed cost-cutting programme was expected to boost profits, as was a huge contract with the US National Cancer Institute. Most important of all, the company was enormously optimistic about its future. But once again, Asterand has disappointed me. It announced in late-March that it would release its 2010 results on April 7. My alarm bells began to ring when on April 5 it suddenly announced a delay. Unexpected last-minute postponements often precede bad news. The company explained that its bank suddenly blocked access to funds that were intended for the former owners of BioSeek, because of a deterioration in trading conditions. I worried that the bank had scented a serious emerging problem. Other investors had similar concerns. Asterand's shares quickly lost one third of their value. New worries emerged when 2010 results were belatedly released. Pre-tax losses were the same as in 2009 in spite of cost-cutting. BioSeek's contribution rose as expected but revenues from the rest of the company fell. Where was the expected revenue and profit improvement? I also worry about the newly-signed US contract. The US faces a huge budget crisis and government contracts are being cancelled, delayed or reduced. We must not ignore this possibility for Asterand. Also, the amount of revenue to be realised from this contract in 2011 is quite small, probably in the $2m-$3m range. Experience teaches me that these shares often surge on news of a big contract and then slump when the contract ends. I fear the current price is supported by the upcoming National Cancer Institute contract. If the US financial crisis hits this, the risk to investors is enormous. Another jarring note was the company's admission last week that it merely aims to break even in the short run, not turn a profit. I now fear that Asterand's prospects for 2011 are poor and have substantially reduced my position, at a significant loss. The company continues to offer investors an optimistic view. I hope it succeeds, but now believe that the odds of a near-term price rise are much lower than I thought them to be in January. Stock market historian David Schwartz is an active short-term trader writing about his own trades. |
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