Amarantus Biosciences, Inc. (OTC:AMBS) Clings to Positions
Amarantus Biosciences, Inc. (OTC:AMBS) is not giving up on its positions, even though the active promotions for the ticker stopped in mid-December. The biotechnology company added 16% to its price on Friday’s trading and with markets closed on Monday for Martin Luther King’s day, investors will have thinking time to cool off or warm up to AMBS.
Until then, the company retains some promising signs, but also financial weaknesses incurred during the period of developing new drugs or therapies for marketing. Amarantus tries to build its future with the following financial strengths and weaknesses:
- $580 in cash
- $4.6 million in current liabilities
- $564 thousand in quarterly net loss
The optimistic news from the end of last year did not do much to preserve the stock levels once the press releases stopped and the short-term pumping effort fizzled out. Amarantus still tests its Parkinson’s disease drug, but as usual years may pass before the company can market it. Meanwhile, in November AMBS approved an increase in authorized shares from 250 million to one billion, meaning to continue to finance its research and testing operations with more stock offers.
Also, the company seems to be protesting its unauthorized trading on the Berlin-Bremen stock exchange, a detail that would allow investors to engage in naked short selling. In an 8-K document, Amarantus claims its stock was listed on the exchange without its knowledge or consent.
Amarantus was mentioned in a market analysis expecting a general rise in equities to lift all boats, getting an average yearly growth of 15% for small cap companies. But given the unexpected nature of stock movements, such a general promise may not scale to a single stock. In fact, the average movement for research-stage biopharmaceutical companies is downward, with stocks weighed down by the mounting debts and losses.
The last pump for AMBS came from CashMoneyPlay, a small-scale pumper with a record of past campaigns. The pumper ran a long campaign for AMBS, boosting its price since November in a paid campaign for $7,500. Other picks such as Great China Mania Holdings, Inc. (OTC:GMEC) is not as lucky, dropping sharply at the end of the pump with little chance of recovery. Although the ticker added 118% on Friday’s trading, in the past month it erased more than 80% of its value on consecutive days of selling.
In bidding for the success of pharmaceutical companies, please estimate your own taste for risk, knowing that short-term movements in the stock may not coincide with its promising potential for the longer term.