Intellicell Biosciences, Inc. (OTCMKTS:SVFC) Slides Despite Stem Cell Hype

After a strong series in price and volumes, Intellicell Biosciences, Inc. (OTCMKTS:SVFC) sank back on Friday, losing a bit more than 12% to $0.63. Without a recorded promotion, SVFC managed to stem its long slide and rebounce with promises of biotechnological breakthroughs based on medical marijuana research. SVFC0715.png

The correction on Friday looks like the minor setbacks from the past weeks, which are easily absorbed in a general rising trend. Still, SVFC shows the possibility to drop by half, as it did in May, so caution is advised when trying out the current relatively low positions at 6 cents. BMSN0715.png

At this position, SVFC is a reasonable candidate for a paid promotion, in addition to its active PR campaign. Still, the company remains a cat in a bag, being late with its financial reports for last year and only revealing limited information on its affairs through 8-K forms. Also a red flag is the constant switch in business descriptions, as in the past the ticker stood for Media Exchange Group, Inc.

The latest boost on Friday was supposed to come from a press release, where SVFC discussed its stem cell recearch potential. But the web interview with the company can hardly be called substantial, and the potential is not translated into financial results. The company only shows dismal records:

  • Zero cashACTC0715.png
  • $334 thousand Current assets
  • $6.7 million Current liabilities
  • $186 thousand Quarterly revenue
  • $1.7 million Quarterly net loss

The new 8-K filings indicate trouble with the accumulated debt, as the company is taken to court for troubles paying back $706,000. SVFC only managed to cover the sum by issuing new shares at 4 cents, more than 18 million shares. That amount could be profitably sold off and to become one of the factors depressing the price if it reaches unsustainable heights. 

The opening on Monday will show if SVFC still has a good reception and if buying will resume, or Friday’s exodus will be repeated. Without concerted efforts to make noise and promises, SVFC is not such a shining jewel. 

Stem cells were the promise of many penny stock companies in the months back, when several tickers rode a trend in the industry. A lot of newcomers promised great breakthroughs in stem cell research, despite the lack of funding and very early stage research. BioMatrix Scientific Group, Inc. (OTCMKTS:BMSN) was such a contender, rising high in the spring months only to crash once the promoters abandoned it. 

Advanced Cell Technology, Inc. (OTCBB:ACTC) is another active ticker that got a boost from publicity, only to draw back. In the biotech sector, it is best to be skeptical of big promises and not invest unless you can also afford the correction following the disproportionate rise in price.

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