The volume of short sales increased substantially on 11 April...

The volume of short sales increased substantially on 11 April when the Q1 revenue downgrade was announced which indicates to me that their strategy was/is related to the impacts of the downgrade, rather than anything related to RECELL GO.



The $4M reduction in Q1'24 revenue, which resulted in wiping $172M off the market cap, could still have some knock-on effects that shorters may benefit from if the situation doesn't substantially improve soon. E.g., higher than expected Q1 net loss, lower than expected Q2 guidance, FY24 revenue downgrade(s), delay in reaching profitability by Q3'25, future funding requirements, etc.

With the upcoming Q1 results fast approaching, I may as well share my revised expectations, thoughts and guesses in case anyone is interested (and so I can be proven wrong again):



That Q1 comparison snapshot looks ugly, but is the market now expecting this since the share price has decreased by 42% and Q1 EPS might miss by around 40%?

If management continue to be consistent with their revenue downgrades 4-6 weeks after reaffirming guidance, then the shorters will be happy this week. However, unless the directors want to prove their incompetency prior to the upcoming proxy vote (don't forget to vote by May 30), I think they'll reaffirm:

1) their confidence on the RECELL GO approval
(Based on the early salesforce expansion; GO manufacturing facility expansion & production; with 3 weeks to go, I'm imagining they're through the deficiency notice period - ignorance is bliss)
2) FY24 lower-end of guidance expectations
3) profitability by Q3'25
Note: they can revise their expectations on 2) and 3) in another quarter.

It will be interesting to see where they set Q2'24 revenue guidance. At this stage, anything over $15.5M would be positive from my perspective but I'd prefer $17-$18M. If GO is approved, they'll have June to commence the roll out of GO to new (71) and existing (140) accounts. I wonder how many cassettes each account would initially order?

It doesn't sound like there is anyone on HC (including me) that is currently expecting the company to achieve FY24 revenue guidance of $78.5M+ so, I thought I'd revisit what the company could be seeing which they think could be sufficient revenue growth drivers:





I have thrown a few numbers around to get the following (best-case/hopefully worst-case?) scenarios:




With the company currently sitting on a P/S ratio of around 4.2x and an EV/R around 3.5x, there seems like there's potential for the SP to improve if the FY24 revenue looks like it will be between t he above scenarios:



From a charting perspective (I'm not a chartist though), a double bottom has formed off the previous high in August '22:



With the AVH price expected to be ~$2.50 tomorrow, I'm tempted to redeploy some funds tomorrow in the hope that things will improve from there. Melody is probably going to kill me if he can't talk me out of it though..