New Emails Give Nuvilex Inc (OTCMKTS:NVLX) A Push
Wall Street Report (WSR) were the ones alerting traders about Nuvilex Inc (OTCMKTS:NVLX) through the emails. The first one came shortly after the closing bell on Wednesday and the second one hit the inboxes just before the start of yesterday’s session. We’re not sure if it was WSR’s alerts that caused it, but we should point out that trading went rather well. The ticker opened the session at $0.1385 and remained above that figure throughout the day. More impressively, it closed at the high of the day and the volume generated exceeded 7 million shares – around five times higher than the three-month average. This is a welcome relief for the shareholders who witnessed two red sessions in a row on Tuesday and Wednesday but apart from WSR’s emails, could there be any other reasons for the increased interest?
Well, NVLX did file an 8-K report related to the much talked about acquisition of Bio Blue Bird AG on Wednesday but, quite frankly, it doesn’t contain any new information whatsoever. The merger itself is quite interesting though. Before the acquisition took place BBB was a wholly owned subsidiary of a company called SG Austria (an enterprise quoted as “the leader in the cell-in-a-box technology”) and they owned some licenses for the cell encapsulation technology which, as you know, is what NVLX are interested in.
Initially NVLX wanted to acquire the whole of SG Austria and not just BBB but it would appear that they changed their mind. The deal cost them $1.5 million and it was paid in cash which means that the 100 million shares reserved for the closing of the merger were returned to the treasury. This is also good news but the “research” groups that we talked about in our previous articles seem to be taking it a bit too far.
Goldman Small Cap Research (GSCR) told us on Wednesday that NVLX are “teaching Wall Street a lesson” while Stock Market Group (SMG) wrote yesterday that the acquisition could be worth billions. Both headlines appeared on NVLX‘s Yahoo Finance profile and we’re pretty sure that they added to the excitement.
The lesson that GSCR talk about hides in the fact that NVLX decided to acquire BBB rather than SG Austria. According to them a merger with the big company would have been too big a bite for NVLX‘s mouth and they say how great a decision the cash payment had been. Certainly, the cancellation of 100 million shares set aside for the acquisition will prevent dilution and the price of a merger with SG Austria would have been a lot higher, but we still think that “teaching Wall Street a lesson” is pushing it a bit too far. As for SMG and their billion dollar predictions, we still reckon that it’s a bit too early for such grandiose claims.
Especially considering the information available on the Internet about Bio Blue Bird AG. Or rather, the lack of it. Sure, if you do just a quick check, you will see that NVLX‘s press releases as well as the optimistic articles written by SMG and GSCR are plastered all over hundreds of informational websites, but when you take Nuvilex out of the search, you will see that apart from the registration in Lichtenstein, there’s virtually no information at all.
Another thing that raises some eyebrows is the similarity between the names of BBB and Bluebird Bio Inc (NASDAQ:BLUE) (who recently completed their IPO). Apart from that, however, the two entities don’t appear to have anything in common.
This means that right now, an investment in NVLX resembles a shot in the dark and you really need to trust the company’s PR department, GSCR and SMG. The latter two seem to be quite desperate to create some excitement around the company and we fear that it might get too much at one point. NanoTech Entertainment, Inc. (OTCMKTS:NTEK) showed us over the last couple of days what the results could be if that happens.
