Ekso Bionics Holdings, Inc. (OTCBB:EKSO) Dragged Down
Yesterday’s session was red slaughter for Ekso Bionics Holdings, Inc. (OTCBB:EKSO). The stock had half an hour of level trading, then it was a steep ride downhill. Intra-day EKSO dipped as low as $1.00 flat per share and eventually stopped 21% down at $1.36 per share.
The most obvious reason for the massive drop was a vitriolic hit piece put up by a popular stock blog. The author, somewhat predictably, disclosed being short EKSO stock. The centerpiece of the article was the securities lawyer who conducted the reverse merger that resulted in EKSO – Mr. Adam S. Gottbetter. Last week the SEC put up an official press release informing Gottbetter was charged with market manipulation, along with two promoters. He agreed to pay a settlement of $4.6 million for his involvement in the manipulation of the stock of several companies. EKSO was not among them.
Separately, in a May 27 article TheDeal dot com stated that Gottbetter agreed to a 1.5 year sentence in a settlement on charges of “conspiracy to commit mail and securities fraud”. Again, the piece mentions a number of pumped companies but EKSO is not among them.
The caustic piece on EKSO further levies some very serious allegations, including that the company outright lied about its involvement with Boston Dynamics. In October 2014 EKSO announced the Google-owned robotics company selected EKSO to “execute DARPA project”. The article’s claims are substantiated by little except the author’s word and this is the word of someone who is short EKSO.
The piece further goes to compare competitive products to what EKSO offers, presenting EKSO‘s suits as both inferior and pricier.
There are two issues with yesterday’s crash and the vitriolic article in question. The first would be that the news of Mr. Gottbetter’s problems with the SEC and the DoJ did not break on the day of the drop, or even immediately before it. The SEC press release on the subject was put up last Tuesday and the Deal article – on May 27, so the news alone did not really sent EKSO crashing without the extra nudge of the article and its bombastic headline, predicting a 92% drop.
The second would be that, unpleasant as this situation is, EKSO was not one of the companies Gottbetter and his contacts manipulated and he was not part of EKSO‘s management team or board.
That is not to say it’s all sunshine and rainbows at EKSO. The company does have over $21 million of cash on hand, so the talk of running out of money in the immediate future may not be well-founded. However, the company is still generating seven-digit losses over a single quarter.
