Weekly thought on $AEMD, $IBIO, $LRAD, $SOLOW

Before you read on, please be aware that the analysis below is my opinion only and may include flawed assumptions and inaccuracy of logic; therefore, caveat emptor applies here.  Furthermore, all emphasis (color-coded, boldness, and underlined) on the excerpts are my own.

Just when we thought the bull was back, the bear attacked furiously once again.  SP-500_weeklyAs you can see, SP500 is now back at the weekly 79 & 89 MA supports.  Because this week ended with a bearish engulfment candlestick weekly bar, there is a 50/50 chance for the price to penetrate the 79 & 89 MA supports.  Even though current after-hour SP500 price action is at negative territory right now, the bull still has a chance to make a come back in the coming week.  From the weekly chart above, there are always the 2nd, 3rd, and 4th supports before the bear takes control of the SP500; so it is to the best interest of the overall market that the political soundbites change the tune to be favorable to the bull market.

Giving the volatility of the week, I sold my $CGC call options and $MMNFF to raise cash. I also took a position in $MU on Thursday looking to hold for a bounce to the upside, but the reversal on Friday stopped me out.

$AEMDWhen a medical device received TWO breakthrough device designations from the FDA that have the potential to save lives that are extremely difficult to save with currently available medical science, I’ll be a fool to take short-term profit on this one.  Below are the two breakthrough device designations approved by FDA:

  1. The Hemopurifier is a single-use device indicated for the treatment of life-threatening highly glycosylated viruses that are not addressed with an approved treatment
  2. The Hemopurifier is a single-use device indicated for the treatment of individuals with advanced or metastatic cancer who are either unresponsive to or intolerant of standard of care therapy and with cancer types in which exosomes have been shown to participate in the development or severity of the disease. Therapy with the Hemopurifier device should be an adjunct to standard of care for cancer.

When either one of the above (or BOTH of the above) prove to be effective, I don’t have to tell you how big Aethlon Medical can become.  I bet that there will be a bidding war from BPs to acquire it.

$IBIO – iBio will benefit significantly on Aethlon Medical’s hemopurifier success when it comes due to its being a leading supplier of the hemopurifier’s bio-material.  Meanwhile, its own lead therapeutic candidate, IBIO-CFB03, for the treatment of systemic scleroderma, idiopathic pulmonary fibrosis, and other fibrotic diseases should begin Phase I soon enough.  We just need to wait for the announcement of the filing of IND.

Meanwhile, recent news “Ebola spreads to major Congo city as vaccine remains a concern” is a significant concern with the world watching.  Per the article: IBIO_Merck300KVaccine

When 300,000 doses will not be enough, and it is taking Merck months to prepare another 300,000 doses, how long do you think it will take DARPA and CDC to knock on the iBIO door to mass produce the experimental vaccine that is going to take less time to prepare than Merck with iBIO’s plant-based technology?  Once Ebola spreads in the city, there is no time to wait for months. The vaccine is needed ASAP!  Due to the communication fiasco in 2014 that resulted in a legal settlement with shareholders’ lawsuit, you can bet on the fact that iBio is NOT going to say a single word about the Ebola crisis until they have an actual signed contract with DARPA and/or CDC to mass produce the vaccine.  My point is that when the news hit, it will be a major gap-up. I don’t think there is going to be any head up beforehand.  In other words, short-sellers and sidelined investors will probably think nothing is going to happen with $IBIO since they’re so quiet so far with the Ebola crisis.  I bet that communication probably already starts between iBio and DARPA/CDC.  Remember, DARPA funded most of the biomanufacturing facility that iBIO operates right now; hence, they’re well aware of iBIO’s plant-based technology and its effectiveness.  Below is an excerpt from their FWP SEC filing on June 13, 2018,

IBIO_CDMONeedless to say, both $IBIO and $AEMD are definite holds when Ebola crisis is raging on.

$LRAD – LRAD will have its fiscal year-end earnings release next Thursday on Dec 13th.  Giving their multiple million dollar deals made through their fiscal year, I already know they are way ahead from previous fiscal year.  What I like to know is more update on their mass-notifications systems sales to the cities. How far ahead are they in working out deals?

$SOLO – This one is in a state of flux. Short-sellers are very pessimistic due to CEO past history, but I’m more optimistic because of Zongshen involvement.  Zongshen did not become the fifth largest motorcycle manufacturer in China by being unreliable in the process of manufacturing motorcycle.  Besides, Zongshen owns 10% of $SOLO, so it is in their best interest that $SOLO succeeds as well.  Basically, short-sellers believe Zongshen will not deliver the Solo and that demand will not be there.

On the other hand, I believe Zongshen will deliver the first batch of Solo in Jan 2019, and the demand will catch on once people in California starts to see the Solo on the streets.  Short-sellers think they have the upper hand because of their “critical analysis” based on past history; to me, critical analysis is just a fancy word to use in predicting an unknown future based on rear-mirror data.  If the world remains static; perhaps, the short-sellers have the upper hand.  However, the world is far from being static. As far as I’m concerned, the automobile market is in a state of change that favors the trend in the electric vehicle.  Thus, despite past history and data, I believe the arrival of single-seat EV will be embraced as part of the change favoring electric vehicle.  Jerry Kroll, CEO of Electrameccanica Vehicles Corp, with the help of Zou Zongshen may find themselves catching the beginning of the megatrend in the electric vehicle.

Here is another example of the change that can throw the short-sellers’ thesis in disarray.  Below is an excerpt regarding the infamous Michael Dell appraisal on Apple Computer back in 1997 after Steve Jobs came back to the company: SOLO_appleGiving the bleak financial history of Apple during the time leading to 1997, it seemed like a wise statement.  But then Steve Jobs approached Bill Gates and got the money to kickstart Apple with iMac, then the iPod, and followed with the iPhones.  My point is that the short-sellers may be right based on past data, but they’re not going to be 100% right in the dynamic world where past history and data don’t necessary foretell the future in a changing world.  Zou Zongshen is the new element that, per my 2 cents, is going to throw the short-sellers a curveball.  And the demand for Solo is an unknown factor that EVEN the short-sellers CANNOT predict.  Sure, short-sellers can assume the market is not there, but their guess is just as good as mine.

In summary, as far as $SOLO goes, BOTH the longs and the shorts are at risk.  Giving that I’m holding $SOLOW, I’m betting that the Solo will take off after Zongshen delivers the first batch of Solo in Jan 2019.

Due to the down market where everything went down which included $AEMD, $IBIO, and $LRAD, my port gave back some more.

Current positions (in alphabet order):

AEMD  IBIO  LRAD  SOLOW & cash (up 6% YTD)

My 2 cents

From my camera:

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Categories: Daily trading Journal, trading journal

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