Monday, June 30, 2014

MBLX - Metabolix, Inc. Broken Promise Means Investors Should Sell Now

Summary:
  • CEO hasn't done anything but re-run a few investor conference presentations to yawning investors. 
  • MBLX stock has been trading under $1 and they risk being de-listed by NASDAQ.
  • A round of fundraising was promised by end of the month but hasn't happened. 
Effective January 2, 2014 Metabolix appointed a new CEO and investors held out hope he could turn this sinking ship around. 

CEO Joe Shaulson had a lot on his plate. Metabolix needed to raise cash levels on the balance sheet. They also need a commercially viable product, more than likely via a partnership with a larger company. 

Here's what Joe has done:
So Joe's had 5 cracks at trying to drum up some interest in this company and he's come up empty. Given he's been here 6 months, he's probably just happy he got to travel around the USA on the shareholders dime. Certainly that's the only bright spot investors can see come of these conferences. 

Adding to the companies woes is that May 19th was the last day the company's stock was trading over $1.00 per share. As penny-stock investors know, if a security trades for under $1 for 30 consecutive trading days - action will follow from the exchange they are trading on ... and in the case of Metabolix - that is the NASDAQ.

Finally, CEO Joe's "plan" was to have financing in place by today! If you don't believe me, here is what he said to investors on a conference call: (Bold added by me for emphasis)
So yes, I mean our plan – right now, our focus is balanced between financing and operations. I’m looking forward to the point in time where the balance shifts more to the operations than where it’s been for the past couple of months. But I would say that our plan to complete at least the first phase of financing by the end of June and we would expect to have a full set of information for investors about what that financing looks like when we announce it. And to complete it by the end of June, it means we’d have to announce it by the end of June.
- CEO Joe Shaulson (Q1 2014 Conference Call
Trust me, if Joe Shaulson had any positive news about Metabolix to announce - he'd come out with it. The bottom line is he didn't get the job done. Maybe it's because Metabolix is already a sinking ship that Joe couldn't save in 6 months ... or Joe just didn't get the job done. Either way, it's the end of June and there's no financing in place, and the stock currently trades for less than $1 dollar.

Investing in this company now would be like betting on a team who were down 3 scores with only 1 minuet left on the clock. While teams have come back to win in situations like that ... it takes a series of miracles in order to win the game. Metabolix is in that situation now. Any partner/competing company can just wait for Metabolix to go bankrupt. Banks, lenders or deep pocket investors have more attractive investments to gamble on. The only thing Metabolix can do is hope a 1st time CEO can pull off a miracle to save the company. Given that Joe Shaulson has not done anything except travel to some investor conferences (something an 8th grader can do) .... I don't expect any positive news from Metabolix. This company has a very good chance at not being around in 6 months. 

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