Aethlon Medical, Inc. (OTCMKTS:AEMD) Tumbles Down
It all began a couple of months ago when Aethlon Medical, Inc. (OTCMKTS:AEMD) started telling people that they might just be able to take part in the battle against the terrible Ebola virus. They weren’t the only ones. Plenty of penny stock companies made similar claims, but, as it turns out, this was a rather risky move.
On November 20, the SEC decided to suspend no less than four OTC-listed stocks because, apparently, the press releases weren’t in line with what’s really happening. As you can see, AEMD avoided the suspension order, and there is a very good reason for this.
AEMD is one of the few companies that actually did something to battle the deadly virus. You might have heard already that their flagship product, the Hemopurifier, was used for the treatment of an Ebola patient. You might also know that he managed to recover from the horrific disease and was discharged from the Frankfurt University Hospital on November 25.
This brought in quite a lot of attention to AEMD, and the Time Magazine even put the Hemopurifier on the list of the 25 Best Inventions of 2014. The company recently announced that they have even started shipping the filtration systems to the Biocontainment Unit at the Nebraska Medical Center.
So, the company clearly received quite a lot of exposure but what about the stock?
Well, you know that some good news is always bound to give OTC tickers a push and it’s quite clear from the chart at the beginning of the article that AEMD was affected by the Ebola press releases.
Needless to say, we covered the spike and we mentioned numerous times that there are some issues. AEMD‘s printing press, for example, has been pushing out quite a lot of shares over the last few months. The O/S count grew from under 225 million on March 31 to more than 295 million on November 7; and once you take a closer look at the reports, you’ll see that an alarmingly large portion of the newly printed stock was issued at rates that, in some cases, stand at under $0.05 per share.
Nevertheless, people were too excited to care. There were some red sessions, but they weren’t strong enough to upset the uptrend and on November 24 AEMD reached a 52-week high of $0.72 per share.
Unfortunately, the stock has shown some signs of weakness over the last week or so. Only two green sessions were registered since the 52-week high and the cumulative losses now amount to more than 20%. Yesterday, AEMD plummeted below the $0.50 mark and closed the day at $0.45 per share on a dollar volume of $7.23 million. Once again, there is a very good reason for this.
Many people believed that the recent developments will help the company stop the dilution and put an end to the issuance of discounted shares. As it turns out, at least for the time being, that’s not completely the case.
An 8-K form from the end of last month informed us that some more stock has seen the light of day at prices ranging from $0.11 to $0.22 per share, and on Tuesday AEMD closed a securities purchase agreement and sold 11 million common shares and 13.2 million warrants (exercisable at $0.30) for a total of $3.3 million.
As you can see, even though AEMD experienced a painful crash over the last few days, the newly issued equity is still hovering comfortably below the current market price, and the fact that the company itself valued the stock so low is discouraging investors.
The future should tell us if AEMD has what it takes to regain the market’s trust. In the meantime, looking at both sides of the coin is, as always, your best bet.