Bioelectronics Corp. (OTCMKTS:BIEL) Returns to Growth
Bioelectronics Corp. (OTCMKTS:BIEL) is fighting to keep the rapid gains it made a few days back, after positive FDA news and a boost from a promotional email. After a threatening correction, BIEL added more than 18% to $0.0038, on buying volumes above $807,000.
BIEL has been picking up in volumes, if not price, in the past few months, as it supplied positive news on its pain management technology. In this, the stock behaves much like other pharmaceutical companies, which lose price positions if they spend enough time without convincing enough forward-looking statements. BIEL also hinges on recognition and regulation, and the latest FDA statement reclassifies the electronic pain management devices as Class II therapies, meaning an easier and more direct path to market.
The only problem is that BIEL would be already competing with more generic TENS machines, an almost ubiquitous technology available for at-home pain relief even through online shops. True, the devices of BIEL use short radio wave technology, which until now has been use only in clinical settings and is bulky and expensive, but it remains to be seen how successful future sales will be. And the balance sheet itself shows that BIEL will have to struggle more to achieve success, as it has some serious deficits accrued in the long period of development:
- Cash and cash equivalents – $35 thousand
- Total current assets – $869 thousand
- Total current liabilities – $3.3 Million
- Sales – $110 thousand
- Gross profit from sales – $5 thousand
- Net loss – $734 thousand
Investors’ forums show a confidence that a return is in store for the stock that has lagged in the past year or so. And BIEL is still cheap enough to attract buyers easily. But there is a problem- more than 3.4 billion shares outstanding that are standing in the way of creating enough scarcity to lift up the ticker. There are 1.8 billion shares in float, and enough waiting in the sidelines. BIEL so far is shown to be a generally higher-quality company, that nevertheless keeps a depressed stock price.
A similar case may be Bebida Beverage, Inc. (OTCMKTS:BBDA), which despite its robust activity and distribution is still hovering below the penny levels. In the latest bout of unusually high activity, the lack of a real squeeze meant the price hardly went above $0.003.
Marina Biotech, Inc. (OTCMKTS:MRNA) is among the more recent pharmaceutical movers, a pure-play developer of RNA-based therapies. MRNA has been retreating in the past days, after peaking out at $1.70, and is now facing the final trading day of the week at $1.44. MRNA also took off recently after testing the patience of investors, and was among the few pharma companies that did not use the boost of medical cannabis to lift up their positions- the model of MRNA is just not equipped for this.
If you like BIEL for its future promise, keep in mind that the share structure may mean the potential for gainful days, but also for significant setbacks, so plan the size and timing of your investment accordingly.