IMO the terrible performance of EBR in the 6 months following listing has got a lot to do with the sell-down from today's high of $1.135, and of course the opening price of $1.07 was 1 cent below the IPO price.
Today the Company has had its highest ever trading volume but knowing about its first inglorious 6 months performance I'm surprised that only 2.65 million shares were traded today, I would have assumed more would come out. Maybe the share price will continue to move just below the $1.00 mark (a capper of just under 0.45 million shares @ $1.00) for a while yet until those IPO sellers dry up.
From a longer term perspective there's no obvious announcements due for quite a few months that could propel the price higher, with the Company now focused on the PMA submission documentation, other than the second draw down of the Runway Capital funds, of US$20 million. Maybe that time frame and Company focus in coming months could be a reason some investors will simply look on for the time being (IMO it's a great time to nibble a few more ).
Clearly that intention to drawdown from Runway Capital gives the market a view from the board that its current share price significantly undervalues the Company - and it also dispels any thoughts from prospective investors (and opportunists) of a future Capital raising within the next 12 months (and it also has plenty of cash in its own right notwithstanding the Runway Capital facility availability).
My initial and very conservative valuation, based on only 3.5% take up of devices from a total US$2.5 billion market in the first 12 months, and a PE of 15 (very very conservative IMO), is $1.44/share, with future years valued at $2.55 and $5.53 as margins increase from an initial 40% -> 50% -> 60%, and market growth from the initial 3.5% -> 5% -> 10%.
The posibility of a takeover, from either of Medtronic, Abbott Labs or Boston Scientific will remain, and only get stronger as the Company moves towards FDA approval, and then towards commercialisation. And note that the WISE device is meeting an unmet demand, and works complementary to the existing pacemakers already being utilised. It is NOT competing against other established pacemakers already in the market.
I doubt very much the transmitter issue will hold back its potential, and the thought that it will likely transition to a rechargeable battery on a weekly basis as was outlined in the Annual Report 2022, and by John McCutcheon in the Webinar today, will be another very positive development for the WISE device.
EBR remains my best long term investment from a capital growth point of view.
EBR Price at posting:
$1.00 Sentiment: Buy Disclosure: Held
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(20min delay)