Amarantus Bioscience Holdings, Inc. (OTCMKTS:AMBS) Recovers Last Week’s Losses
The last few days showed how Amarantus Bioscience Holdings, Inc. (OTCMKTS:AMBS) managed to play out a drama between 6 and 7 cents. While last Wednesday AMBS slid down a third, the next two days came with a good recovery. On Friday, AMBS added more than 20% to $0.0718 on dollar volumes above $710,000. 
AMBS delivered two PR messages in the past two days, the one most probably leading to the red day this September 4th. The company announced it would issue new shares and warrants worth a total of $1.4 million. The company has a billion shares authorized, and with 460 million outstanding, the next few years may come in with dilution, especially if the company tries to secure cash and resources through share and warrant sales. And if the warrants are exercised in full, the company would receive $3.5 million in cash.
The warrants are in the form of convertible debentures that may be converted at 4 cents per share at any time. This means that even at the current prices, warrant holders may see modest profits- although a further rise in price would be a better incentive to convert and sell. The plan of AMBS is to use the funds to put one of its new drugs into commercial use.
Time will show whether AMBS indeed manages to bridge the troubles in its balance sheet, and continue on its mission to treat socially significant diseases. But it is easily seen how even one piece of news could cost a big chunk off investments. AMBS is also met with pessimism om message boards, awaiting this week to come with a more permanent correction.
As for the AMBS balance sheet, it contains:
- cash: $67 thousand
- total current assets: $481 thousand
- total current liabilities: $5.5 million
- revenues since inception: $0
- net loss: $900 thousand
The company struggles like many other pharmaceutical penny stocks. Once a darling, such a ticker could move down easily. Such is the case of Advanced Cell Technology, Inc. (OTCBB:ACTC), which rode the stem cell hype, only to enter a long slide between nine cents and the current levels between 6 and 5 cents.
And at a higher price, TNI BioTech, Inc. (OTCMKTS:TNIB) performed a spectacular dead cat bounce, once it slid from $4.75 to below $1.75. Then, TNIB added a dollar and lost it again in just a few days.
In the case of pharmaceutical stocks, good days can be numerous as loyalty and expectation boost the ticker, but bad days tend to be really bad. With so many red flags and instability, be aware of the risk for AMBS this week and at any time, and avoid investing unaffordable sums.
