Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: Gregmal on November 17, 2018, 09:36:23 AM

Title: MDXG - MiMedx Group
Post by: Gregmal on November 17, 2018, 09:36:23 AM
This is something I've had an eye on for quite a while and I feel the story has finally played out and the risk to reward here is now massively skewed to the upside.

I am not an expert on these type of companies. Zero is still definitely a possibility. This is a massively overcrowded short.

However, the one thing no short has been able counter, is that MDXG does have solid products that are overwhelmingly viewed favorably by doctors, employees, and even competitors.

Over the past month or so, the perfect storm of shoes dropping has occurred. Kicked out of smallcap index, delay of filings, delisting, and a poison pill to name a few. The company also seems to have completely cleaned house, and generally speaking, it's actions in no way reflect a company on the brink. I specifically believe that the past 2 weeks have brought out every forced seller possible, and now the shares even trade at a discount to Citron's $3 target.

All in all, this one is simple. The actions of the company, and the precedent set by regulators leads me to believe that MDXG's existence is not likely threatened. And if it survives, it is a multi bagger from here. This is a great spec. long...
Title: Re: MDXG MiMedx Group
Post by: Cigarbutt on November 17, 2018, 11:08:43 AM
Opinion:

Promising field but IMO nowhere near lasting clinical applicability.
Investing profits from sentiment rebound is not excluded but the odds are stacked against the investor.

It's hard to evaluate precisely the odds of developing a product with sustainable moat in the short to mid term concerning their wound or surgical products but, for the injectable products for pain, I evaluate the odds at less than 1 in a million.

With all due respect and even if what is promoted appears to be sophisticated and vanguard, in my humble perspective it feels like:
https://www.youtube.com/watch?v=gN-ZktmjIfE
Even if you are dealing with the Wright brothers here, I would guess that the eventual "successes" may be coming out of left field.
Title: Re: MDXG MiMedx Group
Post by: JRM on November 18, 2018, 05:08:15 AM
I haven't spent any time on this; I just know they've been accused of fraud:

https://www.youtube.com/watch?v=W6jykRgR3dE
Title: Re: MDXG MiMedx Group
Post by: Gregmal on November 18, 2018, 08:03:43 AM
Yes, this one has been quite interesting, for a long time. I've always thought the short case had more merit than the long case, however was never able to get a good response from any short piece about why their offerings where highly regarded and why even competitors typically saw them in a favorable fashion. I don't doubt there is/was fraud on some level.

If, as some have stated, we're dealing with bribes and channel stuffing, from years ago, done by employees who no longer work there, I mean thats not blowing them off the map.

So essentially where I am at, is that is should clearly have a SPECULATIVE AF disclaimer, but with the convergence of recent event, this IMO is where you take a shot at this thing.

Think about it for a second. The people truly behind the scenes just put in a poison pill at $6. If this is a fraud or ending up a doughnut, wouldn't they at least try to pass the hot potato or salvage something for shareholders? But instead they took a measure to assure the company wasnt going to get sold for a quick 20% premium, ~$7 a share. ALA Papa John's sub $50. Now at $2.5, with ZERO having changed, even at a 20% discount to the poison pill announcement, you have 100% upside.
Title: Re: MDXG MiMedx Group
Post by: kab60 on November 18, 2018, 08:11:07 AM
Haven't dug deep but I suspect you're right. Reading the last Petit filing one gets the impression he mig be working on launching an offer for the Company. Strange if it is a donut.
Title: Re: MDXG MiMedx Group
Post by: TBW on November 18, 2018, 11:36:18 AM
I would be really careful with this one.  I have been short, covered most of it recently but hold some remaining put positions.

The first thing to note is no one has any idea what the underlying revenue is and last 6 yrs of financials are being restated.  If you look at its comps OSIR and DSCI, they all started with roughly the same amount of revenue in 2013, MDXG/OSIR has $25mil, DSCI had $34mil.  MDXG grew revenues are 75% pa (!?!), OSIR, and DSCI at 35% and 11% respectively.  The amount of stuffing that may have occurred here could be enormous.  You will also note that OSIR ran into similar issues with its management team and growth slowed significantly.  If you apply OSIR growth rate of 35% to 2013 revs then Epifix revenues would be in the ~$120mil range.  Attached a 3x rev multiple (like OSIR) and keep MDXG's other line of biz flat at $60mil you get a value of ~$492mil, or $4.40 per share.  Certainly higher than current price but not that great.

You have to keep in mind that the previous CEO is fired for cause and having all his comp shares clawed back.  Usually that is only if criminal activity occurred.  The underlying sales number is anyone's guess.

Then you have the liabilities to think about.  The accounting restatement, especially given C-suite firings, over 6 years is going to be really expensive.  They also have a mountain of lawsuits from whistleblowers, hedge funds, equity holders etc.  There is also the cost of VA, DOJ investigations, SEC fines etc.  Going into all this the company only had $30mil of cash.  Even if equity value is positive, is it really greater than all these liabilities?  One counterpoint here, somehow the company has survived this long, so maybe it still is generating some cash, and that is a positive point.  However, their current CEO is from A&M a restructuring firm and he is paid hourly.

As for as the product.  It is really hard for me to know.  This company was growing sales really quickly, but not much cash.  This could indicate, and there is evidence to suggest that perhaps bribes were paid to increase sales.  No idea if this is true, but may explain why they grew sales at incredible rates relative to its peers.  This may also explain why their product is loved.

Having spoken to some dr friends they say that the evidence behind wound care like this is mixed.  There is a lot of hype, there is a need for better products, but it is not clear if these products work as well as advertised.  He also was surprised by the amount of sales as he thought the market was pretty small as this stuff is used for difficult wounds like diabetes etc.

If you attach peer growth rates and multiples you can make the argument that this stock is not that cheap.  If you consider the liabilities then you may say its is very expensive.  Since none of this is exactly clear I have covered because if I am wrong it could go up a lot.  On the poison pill, they may just be doing this to preserve NOL's if there were to file?  Just a guess.  I am not sure one can read into it too much, seems like a standard move any company with such advisors in control would do.  But I could be wrong.

My view is this could be interesting if they restructured.  That would cause an even bigger equity washout, and then any discount to the value of the underlying business could be very large.

The counter point is that DOJ/SEC/courts are very hesitant to force a company to fail.  Therefore they may lean on the light side on any fines/charges etc.  In that case the stock does go up, but perhaps not nearly as much as it may appear.
Title: Re: MDXG MiMedx Group
Post by: Gregmal on November 18, 2018, 11:51:16 AM
I would be really careful with this one.  I have been short, covered most of it recently but hold some remaining put positions.

The first thing to note is no one has any idea what the underlying revenue is and last 6 yrs of financials are being restated.  If you look at its comps OSIR and DSCI, they all started with roughly the same amount of revenue in 2013, MDXG/OSIR has $25mil, DSCI had $34mil.  MDXG grew revenues are 75% pa (!?!), OSIR, and DSCI at 35% and 11% respectively.  The amount of stuffing that may have occurred here could be enormous.  You will also note that OSIR ran into similar issues with its management team and growth slowed significantly.  If you apply OSIR growth rate of 35% to 2013 revs then Epifix revenues would be in the ~$120mil range.  Attached a 3x rev multiple (like OSIR) and keep MDXG's other line of biz flat at $60mil you get a value of ~$492mil, or $4.40 per share.  Certainly higher than current price but not that great.

You have to keep in mind that the previous CEO is fired for cause and having all his comp shares clawed back.  Usually that is only if criminal activity occurred.  The underlying sales number is anyone's guess.

Then you have the liabilities to think about.  The accounting restatement, especially given C-suite firings, over 6 years is going to be really expensive.  They also have a mountain of lawsuits from whistleblowers, hedge funds, equity holders etc.  There is also the cost of VA, DOJ investigations, SEC fines etc.  Going into all this the company only had $30mil of cash.  Even if equity value is positive, is it really greater than all these liabilities?  One counterpoint here, somehow the company has survived this long, so maybe it still is generating some cash, and that is a positive point.  However, their current CEO is from A&M a restructuring firm and he is paid hourly.

As for as the product.  It is really hard for me to know.  This company was growing sales really quickly, but not much cash.  This could indicate, and there is evidence to suggest that perhaps bribes were paid to increase sales.  No idea if this is true, but may explain why they grew sales at incredible rates relative to its peers.  This may also explain why their product is loved.

Having spoken to some dr friends they say that the evidence behind wound care like this is mixed.  There is a lot of hype, there is a need for better products, but it is not clear if these products work as well as advertised.  He also was surprised by the amount of sales as he thought the market was pretty small as this stuff is used for difficult wounds like diabetes etc.

If you attach peer growth rates and multiples you can make the argument that this stock is not that cheap.  If you consider the liabilities then you may say its is very expensive.  Since none of this is exactly clear I have covered because if I am wrong it could go up a lot.  On the poison pill, they may just be doing this to preserve NOL's if there were to file?  Just a guess.  I am not sure one can read into it too much, seems like a standard move any company with such advisors in control would do.  But I could be wrong.

My view is this could be interesting if they restructured.  That would cause an even bigger equity washout, and then any discount to the value of the underlying business could be very large.

The counter point is that DOJ/SEC/courts are very hesitant to force a company to fail.  Therefore they may lean on the light side on any fines/charges etc.  In that case the stock does go up, but perhaps not nearly as much as it may appear.

This is an excellent, excellent summary of basically what's up. I interpret, and more or less speculate that the question marks/concerns you listed are revealed more favorably than the market expects, but its really just a moderately educated guess. Your reasons for covering the short are my reasons for going long here, more or less.
Title: Re: MDXG MiMedx Group
Post by: Cigarbutt on November 18, 2018, 06:20:30 PM
I would be really careful with this one.  I have been short, covered most of it recently but hold some remaining put positions.
...
This is an excellent, excellent summary of basically what's up. I interpret, and more or less speculate that the question marks/concerns you listed are revealed more favorably than the market expects, but its really just a moderately educated guess. Your reasons for covering the short are my reasons for going long here, more or less.
Was planning only one input here but somehow find that this could be useful for perspective on the "product".
This is not about the depth of TBW's anaysis or the validity of Marc Cohodes' investigation which are shining lights on pretty significant red flags.
It's about the product itself.

Here's a hypothetical venture: Placentophagy or the consumption of placenta by women who just delivered it to the world
-Huge market potential
-Almost all non-human placental mammals ingest their placentae at parturition
-Could patent a recipe that could blend it into a smoothie even if raw preparations would be available
-The placenta contains an innumerable amount of difficult to pronounce chemicals with undefined but amazing potential
-Possibility of sponsored studies and inventive sales team
https://www.jognn.org/article/S0884-2175(15)00009-X/pdf

Placentae have a viscous texture and a disgusting look but what sticks with you is the smell. Unforgettable.
I may be wrong but can't you smell That smell? ® (Lynyrd Skynyrd, 1977)
There's the smell of Bad Blood and Henry Kissinger is not even on Board.

Title: Re: MDXG - MiMedx Group
Post by: scorpioncapital on November 19, 2018, 05:18:11 AM
Placental ECM has good potential, it's even being used for hair loss (google amniotic BioD).
However in the space of tissue engineering and biomaterials there is lots of competition and methods and hard to say who is the winner. Lots of claims. For example I know Cook mEdical makes some claim about some biological matrix and then I read some clinical study of those using it who say it just dissolves like putty. So got to be careful there.
I think placental ecm is a kind of semi-autologous ecm. VCEL makes a ecm with your own cells from your own blood. There are many ways to skin a cat and many products on the market just getting started. There are even semi-viscous UV activated biomaterials (eg Poltiss). So if you can pick the winners great, otherwise best to do some thinking.
Integra lifesciences (IART) also has a portfolio of placental ecm products when they acquired dermal sciences, but also other items in the portfolio. Personally I like the more diversified approach, just in case. Although I admit there are some small biotechs with better products. Some are private.
Title: Re: MDXG - MiMedx Group
Post by: alwaysdrawing on November 19, 2018, 06:14:03 AM
No reliable financials since 2012, senior executives fired for cause with clawbacks pursued, surprise de-listing from NASDAQ for unknown reasons (after getting an extension until February 2019), accusations of bribery and fraud at the VA, poison pill adopted to preserve NOLs.....everything here points to an imminent bankruptcy filing.  If they don't file BK before the February scheduled timetable for de-listing, I'd be very surprised.

With a market cap still around $300 million, and still no idea how many shares are currently outstanding, or how much cash is in the bank, and the CEO being paid hourly from a restructuring firm with massive liability shields, and 6 years of financials to re-state, I really don't see much upside even if things go "better than expected". 

Talking about the technology and its potential are fine, but no one on this board should miss the risks here--everything points to this being a 0.  If the issues were going to be resolved, why would NASDAQ immediately de-list?  Why adopt a poison pill to preserve the NOLs?  In fact, if this wasn't going to 0, and there were any chance of solvency, why wouldn't the company be put on the block for sale?
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on November 19, 2018, 01:16:28 PM
Pretty easy. Classic sentiment trade.

As I've said before, returns are everywhere, just gotta find them.
Title: Re: MDXG - MiMedx Group
Post by: John Hjorth on November 30, 2018, 01:02:41 PM
Marc Cohodes about MDXG, among other stuff (https://www.pscp.tv/w/1mnxeOZMbyPGX).
Title: Re: MDXG - MiMedx Group
Post by: TBW on December 05, 2018, 11:07:47 AM
Gregmal,

Was your trade here just that it was oversold and had to pop, and if it did pop it would be substantial given short interest? 

It is well known that even terminal companies can bounce numerous times, by more than 100%, on the path to 0.  While I know that, I never can bring myself to even attempt to trade it.  But power to you if you can.

The news from the company today was awful.  The auditor that was supposed to help the company restate the past 6 years quit, amongst 24% of the staff being fired, etc..  Honest question, How in the world does a company like this ever get out financials?    They have now had 2 of the big 4 quit.  They still have to review the past 6 years of financials.  Who is left to do that for them?  Who can accept that liability, knowing the mess you are getting into?  And finally, who knows if that can afford such an audit?  Really interesting to watch this all play out.
Title: Re: MDXG - MiMedx Group
Post by: alwaysdrawing on December 05, 2018, 11:22:40 AM
https://mimedx.gcs-web.com/news-releases/news-release-details/mimedx-announces-resignation-outside-auditor (https://mimedx.gcs-web.com/news-releases/news-release-details/mimedx-announces-resignation-outside-auditor)

Quote
MARIETTA, Ga., Dec. 5, 2018 /PRNewswire/ -- MiMedx Group, Inc. (OTC PINK: MDXG), a leading developer and marketer of regenerative and therapeutic biologics, today announced that on December 4, 2018, Ernst & Young LLP informed the Company's Audit Committee that it has resigned from the engagement to audit the Company's financial statements for the years ended December 31, 2017 and 2018, effective immediately. Additional information about Ernst & Young LLP's resignation will be included in a Form 8-K to be filed with the SEC no later than December 11, 2018.

https://mimedx.gcs-web.com/news-releases/news-release-details/mimedx-announces-organizational-realignment-program (https://mimedx.gcs-web.com/news-releases/news-release-details/mimedx-announces-organizational-realignment-program)

Quote
The realignment will include a reduction of the MiMedx workforce by approximately 240 full-time employees, or 24% of its total workforce, of which about half are salesforce personnel.

Quote
As previously announced, the Company is restating its financial statements. Due to the depth, breadth and complexity of issues identified, management has expanded the scope of work in connection with the preparation of the Company's financial statements and is unable to estimate the expected completion date at this time. 

Due to the changes in business practices discussed above and other factors, including the inability to provide the full context of current or past performance, the Company is not currently in a position to provide any financial performance-related information.  Moreover, at this time, the Company cannot estimate its exposure, if any, to potential contingent liabilities related to pending and threatened shareholder lawsuits, pending governmental investigations or other legal proceedings.

As previously disclosed, the Compensation Committee and the Board determined that the separations of the Company's former CEO, COO, CFO and Corporate Controller should be treated as "for cause" and that these former executive officers had engaged in, among other things, conduct detrimental to the business or reputation of the Company.  The departures of these former executives have enabled the Company to progress in the preparation of its financial statements. 

The Audit Committee's independent investigation is still ongoing, and there may be other actions taken based, at least in part, on information from the investigation. The Company continues to incur significant legal and accounting-related expenses related to, among other things, the Audit Committee's independent investigation and other legal matters, the Company's work to prepare its restated financial statements and the implementation of improved business controls.

Separately, the Board of Directors' search process for a permanent CEO is active and ongoing, and the Board has been meeting with candidates. However, the ongoing investigation, resulting extensive accounting analysis and pending financial restatement process make it challenging to attract qualified candidates. In addition, the financial restatement process has presented a practical issue with respect to candidates having sufficient information to evaluate the Company's financial situation and overall business.

The end is near here.
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on December 05, 2018, 11:57:09 AM
Gregmal,

Was your trade here just that it was oversold and had to pop, and if it did pop it would be substantial given short interest? 

It is well known that even terminal companies can bounce numerous times, by more than 100%, on the path to 0.  While I know that, I never can bring myself to even attempt to trade it.  But power to you if you can.

The news from the company today was awful.  The auditor that was supposed to help the company restate the past 6 years quit, amongst 24% of the staff being fired, etc..  Honest question, How in the world does a company like this ever get out financials?    They have now had 2 of the big 4 quit.  They still have to review the past 6 years of financials.  Who is left to do that for them?  Who can accept that liability, knowing the mess you are getting into?  And finally, who knows if that can afford such an audit?  Really interesting to watch this all play out.

To me at least, it just seemed that at that given point, you had a pendulum swing that more or less stuffed so much negative into such a short time frame, that simply no news would swing things back to the middle. These events, all occurring in rapid succession, plus what to me seems to be at least to the plausibility that the business could be real, made this kind of an easy opportunity. With a 2 day bounce of around 60% that proved to be the case. So definitely more lucky than good, but finding setups like this, where there are multiple ways to win, is something that I have found sensible and profitable.

A few years back Deutsche got walloped and there was a big overreact, just waiting for the pendulum to swing back again worked out. This one is stickier but if you manage your allocations there is nothing wrong with speculating. Worst case is always zero. No big deal.
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on December 06, 2018, 11:09:01 AM
Well, I like to live dangerously so I got in here again at 1.25 with a very, very tiny position.

For records sake, I do not think this situation at all resembles the one I started the thread with. Yesterday's announcement is single and specific, rather than the multi-pronged clusterfuck that happened in early November. So from here I expect it to just kind of float. No massive snap back. But I do think this has to be the last shoe to drop before we get finality.

The audit will take time, but EY was only doing 17+18. They'll need to be replaced although there is definitely a good chance they don't even end up releasing anything. All in all, the audit IMO is make or break and will probably cost 10-20M. I expect a good chunk to be off-set by FCF but essentially, I think the big risk is the shareholder lawsuits. Those I can't see being resolved until both the audits and the criminal investigations take place. I don't think the gov puts this company away, and if the restated financials are not atrocious, this thing flies and I would assume the capital markets open up as an option to fund any future payouts.

Whereas, any positives, even finding a new CEO or at this point even a little short covering I think get you a good hop.

At the same time there are plenty of high quality companies available, at very cheap prices, so I kind of ask myself WTF I'm doing here with this. But it's only 15 basis points so let's roll the dice.
Title: Re: MDXG - MiMedx Group
Post by: alwaysdrawing on December 06, 2018, 11:12:27 AM
Well, I like to live dangerously so I got in here again at 1.25 with a very, very tiny position.

For records sake, I do not think this situation at all resembles the one I started the thread with. Yesterday's announcement is single and specific, rather than the multi-pronged clusterfuck that happened in early November. So from here I expect it to just kind of float. No massive snap back. But I do think this has to be the last shoe to drop before we get finality.

The audit will take time, but EY was only doing 17+18. They'll need to be replaced although there is definitely a good chance they don't even end up releasing anything. All in all, the audit IMO is make or break and will probably cost 10-20M. I expect a good chunk to be off-set by FCF but essentially, I think the big risk is the shareholder lawsuits. Those I can't see being resolved until both the audits and the criminal investigations take place. I don't think the gov puts this company away, and if the restated financials are not atrocious, this thing flies and I would assume the capital markets open up as an option to fund any future payouts.

Whereas, any positives, even finding a new CEO or at this point even a little short covering I think get you a good hop.

At the same time there are plenty of high quality companies available, at very cheap prices, so I kind of ask myself WTF I'm doing here with this. But it's only 15 basis points so let's roll the dice.

cc:  Bagholder Quotes
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on December 06, 2018, 11:16:25 AM
Well, I like to live dangerously so I got in here again at 1.25 with a very, very tiny position.

For records sake, I do not think this situation at all resembles the one I started the thread with. Yesterday's announcement is single and specific, rather than the multi-pronged clusterfuck that happened in early November. So from here I expect it to just kind of float. No massive snap back. But I do think this has to be the last shoe to drop before we get finality.

The audit will take time, but EY was only doing 17+18. They'll need to be replaced although there is definitely a good chance they don't even end up releasing anything. All in all, the audit IMO is make or break and will probably cost 10-20M. I expect a good chunk to be off-set by FCF but essentially, I think the big risk is the shareholder lawsuits. Those I can't see being resolved until both the audits and the criminal investigations take place. I don't think the gov puts this company away, and if the restated financials are not atrocious, this thing flies and I would assume the capital markets open up as an option to fund any future payouts.

Whereas, any positives, even finding a new CEO or at this point even a little short covering I think get you a good hop.

At the same time there are plenty of high quality companies available, at very cheap prices, so I kind of ask myself WTF I'm doing here with this. But it's only 15 basis points so let's roll the dice.

cc:  Bagholder Quotes

Well, I nailed it once, so I'm probably a little more eager to try it again. Oh well.
Title: Re: MDXG - MiMedx Group
Post by: alwaysdrawing on December 06, 2018, 11:21:09 AM
Well, I nailed it once, so I'm probably a little more eager to try it again. Oh well.

Daytrading fraudulent pink sheets stocks is not the way I would try to compound wealth.  The stock popped and you were "right" but it's down a lot since then, and will continue to go lower.

Good luck on your trade.
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on December 06, 2018, 11:31:03 AM
Well, I nailed it once, so I'm probably a little more eager to try it again. Oh well.

Daytrading fraudulent pink sheets stocks is not the way I would try to compound wealth.  The stock popped and you were "right" but it's down a lot since then, and will continue to go lower.

Good luck on your trade.

I don't disagree. Trading has just as much to do with sentiment and probability as it does with the actually vehicle. See SharperDinegaan's BTC trading last year. You can flip a bag of shit if the entry is right and you have your target in site.

I won't lie though, my core positions are concentrated, and boring... so there a little bit of an entertainment value here for me too. I'm aware of all the traditional value investor no-no's I'm doing, but its my money, it's an irrelevant amount, and to be fair, the way a lot of great investors have spent trying to compound wealth, ie sitting on huge piles of cash for the past decade, hasn't exactly been a winning strategy either.
Title: Re: MDXG - MiMedx Group
Post by: Cigarbutt on December 06, 2018, 11:32:57 AM
Well, I like to live dangerously so I got in here again at 1.25 with a very, very tiny position.
...
so let's roll the dice.
Well, I nailed it once, so I'm probably a little more eager to try it again. Oh well.
I will say: "Wow!"
This episode reminds me of when we watch the TV show that displays home-made videos and that ends up showing the "best of" consisting of a series of "fails" and a conclusion with a "success". With that last "success", one never knows if this was the only take and some ability is often involved but I always say Wow! (with mixed feelings).
But it's good entertainment.
Title: Re: MDXG - MiMedx Group
Post by: alwaysdrawing on December 06, 2018, 11:45:31 AM
Well, I nailed it once, so I'm probably a little more eager to try it again. Oh well.

Daytrading fraudulent pink sheets stocks is not the way I would try to compound wealth.  The stock popped and you were "right" but it's down a lot since then, and will continue to go lower.

Good luck on your trade.

I don't disagree. Trading has just as much to do with sentiment and probability as it does with the actually vehicle. See SharperDinegaan's BTC trading last year. You can flip a bag of shit if the entry is right and you have your target in site.

I won't lie though, my core positions are concentrated, and boring... so there a little bit of an entertainment value here for me too. I'm aware of all the traditional value investor no-no's I'm doing, but its my money, it's an irrelevant amount, and to be fair, the way a lot of great investors have spent trying to compound wealth, ie sitting on huge piles of cash for the past decade, hasn't exactly been a winning strategy either.

Trade how you feel, but pumping a fraudulent penny stock by posting to a value investing forum (or any forum) is not within the spirit of this board (in my opinion).

I only contributed to this thread at all because I think it's important that people know that there are serious issues going on with this security--financials need to be restated back to 2012, CEO/CFO/C-Suite execs fired for fraud, Auditor resigned with no new auditor named (and no disclosure yet of any disagreements with management), layoffs, liquidity issues, no current disclosure of cash or share count, allegations of channel stuffing, de-listing without disclosure of the reason, etc.  This name is simply un-investable as a long idea.

If I were an admin, I would lock this thread.  This is simply not a viable investment idea for people who were not previously involved in this name.
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on December 06, 2018, 11:57:55 AM
Well, I nailed it once, so I'm probably a little more eager to try it again. Oh well.

Daytrading fraudulent pink sheets stocks is not the way I would try to compound wealth.  The stock popped and you were "right" but it's down a lot since then, and will continue to go lower.

Good luck on your trade.

I don't disagree. Trading has just as much to do with sentiment and probability as it does with the actually vehicle. See SharperDinegaan's BTC trading last year. You can flip a bag of shit if the entry is right and you have your target in site.

I won't lie though, my core positions are concentrated, and boring... so there a little bit of an entertainment value here for me too. I'm aware of all the traditional value investor no-no's I'm doing, but its my money, it's an irrelevant amount, and to be fair, the way a lot of great investors have spent trying to compound wealth, ie sitting on huge piles of cash for the past decade, hasn't exactly been a winning strategy either.

Trade how you feel, but pumping a fraudulent penny stock by posting to a value investing forum (or any forum) is not within the spirit of this board (in my opinion).

I only contributed to this thread at all because I think it's important that people know that there are serious issues going on with this security--financials need to be restated back to 2012, CEO/CFO/C-Suite execs fired for fraud, Auditor resigned with no new auditor named (and no disclosure yet of any disagreements with management), layoffs, liquidity issues, no current disclosure of cash or share count, allegations of channel stuffing, de-listing without disclosure of the reason, etc.  This name is simply un-investable as a long idea.

If I were an admin, I would lock this thread.  This is simply not a viable investment idea for people who were not previously involved in this name.

Well, I’m not quite sure where the animosity is coming from but a couple things. I’ve been completely transparent about what is essentially just my opinion. Pumping? Lol come on man, that’s ridiculous.

Second, this is something you state matter of factly, is fraudulent. Whereas I’ve straightout said, I don’t know. But this is also a value idea on a couple other higher end places, including VIC.

So, my apologies to anyone I’ve offended. To think I need to apologize for discussing what is at the least, an interesting situation, is absurd. The community imo is useful for two things, idea generation, and entertainment. And yet it’s anazing to see how many people get their panties twisted because they see a political opinion they disagree with or an investments discussion that no one forces them to read. Perhaps I’m better off wallowing underwater on shit like JD, FNMA, FFH and SHLD because it’s what everyone else is doing...
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on December 06, 2018, 01:36:13 PM
Well, I like to live dangerously so I got in here again at 1.25 with a very, very tiny position.
...
so let's roll the dice.
Well, I nailed it once, so I'm probably a little more eager to try it again. Oh well.
I will say: "Wow!"
This episode reminds me of when we watch the TV show that displays home-made videos and that ends up showing the "best of" consisting of a series of "fails" and a conclusion with a "success". With that last "success", one never knows if this was the only take and some ability is often involved but I always say Wow! (with mixed feelings).
But it's good entertainment.

I didn't see your post but will comment and then I'm done on this name.

The comment is somewhat tongue in cheek but if it brings you entertainment, great. I can't imagine that's not at least partially why we're all here.

On MDXG. The first idea was something I found interesting enough to decide it worth designating capital to within the parameters of what I allow myself to speculate with. The second time things came around the specific stock was the same, the setup quite different, the information available- slightly different, and the capital available, larger...

As such, I looked at the idea and felt after the market adjusts to the new information, that I still think there is a worthwhile place for me to take what is IMO a well adjusted roll of the dice. There is a pretty good chance technically that 1-1.3 was part of the deadcat bounce and this is under $1 shortly. I FULLY EXPECT TO LOSE MY ENTIRE INVESTMENT AND SO SHOULD ANYONE ENTERING THIS TRADE. Consensus everywhere is that this is a 0 because it is a fraud. (IMO fraud does not necessarily mean zero, but w/e) I am ok with the risk here, and at the least thought worthwhile discussion could potentially emerge as it does elsewhere around ideas, but apparently not.

I mean seriously, WTF is with the whiny and hostile attitude alwaysdrawing? I didn't see you losing your shit on all those "chumps" pumping FNMA even though it's clearly worthless...

I've been amazed frankly, at how many super sensitive p**** exist out there. Everyone gets offended by everything. Especially when it comes to politics and investments ideas, everyone gets so butthurt that someone else might have a different opinion. What's that famous Berkowitz saying? To most here, you'd think it was "Follow the crowds"...
Title: Re: MDXG - MiMedx Group
Post by: A Dhandho Investor on December 06, 2018, 02:39:09 PM
Gregmal, reading into your first post this definitely did not seem a ‘short term play’ from your side. Based on that post I would have said you sold this more as a long term bet where the ‘risk-reward was heavily skewed to the upside’.

Here we are, the stock 50% lower less than 1 month after your initial post, and you act as if you nailed it?

Sorry, but I agree that this idea does not belong on a value investing board.
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on December 06, 2018, 02:55:20 PM
Gregmal, reading into your first post this definitely did not seem a ‘short term play’ from your side. Based on that post I would have said you sold this more as a long term bet where the ‘risk-reward was heavily skewed to the upside’.

Here we are, the stock 50% lower less than 1 month after your initial post, and you act as if you nailed it?

Sorry, but I agree that this idea does not belong on a value investing board.

Except for the stock rocketing 60% higher two days after the post.

Again, it would appear to me, on this board, nailing it is buying some value investor consensus stock and riding it into oblivion as you all feed into each other’s biases...like there is shame in making money on a trade... to rich.

Again, not on a value board? Go talk Tesla or FNMA.
Title: Re: MDXG - MiMedx Group
Post by: Cigarbutt on December 06, 2018, 03:14:37 PM
FWIW, I would say that this "idea" was a candidate for discussion and wonder if limitations may not hinder further tough discussions that may be necessary for other names.

Earlier in this thread, a poster disclosed a short position on the stock and this is the kind of work that is sometimes necessary to facilitate price discovery on the way down. The white-knuckle moment displayed by Mr. Cohodes (link submitted by JohnHjorth) suggests that it does not need to get so personal but red flags are red flags and a short seller needs to buy from somebody.

Having said that, apologies to Gregmal for the following:

In sensitive discussions, you tend to cross red lines and, in this case, you did not cross a red line but the elements that you described (even if "worked" or will "work" again in terms of a realized gain) were weak for a value-based board. I can live with the cavalier attitude (simple and easy) but submit that you should have substantiated your case more solidly in this controversial name, especially as an opening poster.
Title: Re: MDXG - MiMedx Group
Post by: alwaysdrawing on December 07, 2018, 01:50:32 PM
EY Resignation Letter

https://www.sec.gov/Archives/edgar/data/1376339/000119312518344985/d628135d8k.htm

Quote
During this same period, there were the following “reportable events,” as that term is defined in Item 304(a)(1)(v) of Regulation S-K:

 

    •       
EY advised the Company that the internal controls necessary for the Company to develop reliable financial statements do not exist;

 

    •       
Although EY could accept representations from the current Interim CEO and Interim CFO based on their knowledge, EY advised the Company that EY is unable to rely on representations from them because, as of the date of the resignation, the current Interim CEO and Interim CFO, in turn, would have needed to rely on representations from certain legacy management personnel still in positions that could affect what is reflected in the Company’s books and records. At the time of EY’s resignation, the Audit Committee’s independent investigation was still ongoing;

 

    •       
EY advised the Company of the need to significantly expand the scope of its audit, due to material allegations of inappropriate financial reporting, material allegations of noncompliance with laws and regulations, the findings to date from the independent investigation conducted by the Audit Committee into these allegations, and the lack of internal controls necessary for the Company to develop reliable financial statements. EY had not completed the necessary work in connection with this expanded audit scope at the time of its resignation; and

 

    •       
EY advised the Company that information has come to EY’s attention that EY has concluded materially impacts the reliability of previously issued financial statements, and the issues raised by this information have not been resolved to EY’s satisfaction prior to its resignation.
Title: Re: MDXG - MiMedx Group
Post by: John Hjorth on December 07, 2018, 03:39:13 PM
Holy Moly! [ 0_0 ] I don't recall to have seen an auditor resignation letter like this - ever - for a listed company. Tim's post (http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/mdxg-mimedx-group/msg354092/#msg354092) comes to mind.

Crucifixion (https://www.youtube.com/watch?v=9knToyK-wUs).
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on December 13, 2018, 09:07:07 AM
Out at 1.65. As they say here, Cheers!
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on January 08, 2019, 06:56:14 AM
Out today, some real research, basically supporting some of the drivers I mentioned.

https://www.presciencepoint.com/wp-content/uploads/2019/01/Prescience_Point-MiMedx_MDXG-Long.pdf

I no longer have a position, but it was so obvious after the delisting that at this point, the stupid retail money was on the short side. Had good laughs reading about people who bought puts and then couldn't get a bid when wanting to sell them. The share price has now more than doubled following "the worst auditor resignation ever!!!", which was supposed to immediately take the company to 0.

Will be interesting to see this continue to play out.
Title: Re: MDXG - MiMedx Group
Post by: LongHaul on January 09, 2019, 06:21:34 AM
Isolated comment:

The flaw in the writeup is that they are looking at Free Cash flow Conversion when a big chunk of the FCF
came from share based comp addbacks.   Assuming they pay cash to employees vs the share comp then much of the FCF disappears. 

I have no idea what long run profitability here could be.

Free Speech

I think free speech on ideas is important whether you are long or short and Greg's post was fine.
This is a marketplace of ideas and you are free to choose to discard any and all. 
Censoring disconfirming opinions is a horrible practice.  It is bad when when the longs try to do it to the shorts and vice versa.  Ultimately the truth comes out on companies no matter what anyone owns or says.

And by they way, I have noticed that given human nature for all of us it is best to pay particular attention to disconfirming evidence.  Too many smart people just brush stuff under the mental rug and they eventually pay for it.


Title: Re: MDXG - MiMedx Group
Post by: John Hjorth on January 09, 2019, 01:46:44 PM
LongHaul,

Personally, I think that you somehow misinterpreted the posts in this topic related to Greg's actions with this stock. To me, - what you & I experienced here, - was actually exactly the outcome of free speech. That said, push back can get pretty dense at times. Greg seems to be up to it. So, all OK.

Only Greg is responsible to himself [and perhaps others with capital under his control] about which buttons he's pressing on his keyboard, and when.
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on January 09, 2019, 05:05:18 PM
First off, I agree with your assessment Longhaul, and yes, good observation about SBC.

Second, while unorthodox, pushback is one of the most valuable, parts of the due diligence process. Bruce Berkowitz labels this aggressive pushing of contrarian points "trying to kill the thesis". That said, there are a ton of sensitive babies here. I try to pushback, sometimes even with the counterpoints on positions I like, mainly because there are so many excuse making circle jerks going on here with the pop stocks like FB, FFH(although here we've had some good quality talks lately) and AAPL, just to name of few of the current ones. The investment process is different for all, but I mean, I thought my 2018 returns were kind of meh, then I see what others here are posting and it just kind of confirmed what I've long thought about a lot of the people here...I'll leave it at that.

Third, this thread was amusing to me. Specifically Alwaysdrawing. I don't normally call people out on a personal level, but what a jackass. He's playing the concerned citizen, getting all outraged that I suggest an idea(a profitable one, which is a rarity on this site of late), ridiculing me and making embellished claims, some of which are a matter of opinion, and stating them as fact, and most egregiously, accusing ME of pumping my position, when I think my behavior in terms of posting my exact to the moment entries and exits here, was as transparent as I've seen on this site. And then weeks later, in a different thread, this jackass lets it slip he's just another short here. So in other words he was pumping HIS POSITON in a dishonest and nontransparent way. Good lord. I've already made my money here.... So I wish him the best.
Title: Re: MDXG - MiMedx Group
Post by: John Hjorth on January 09, 2019, 06:28:03 PM
Greg,

To me, you were not investing here. Also dead on phrased in this topic by Cigarbutt.
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on January 09, 2019, 07:45:42 PM
Hi John,

Traditional, WB/Graham inspired value investing, probably not. Agreed.

However I consider investing to have multiple definitions. I consider using myriad angles, theories, data points, OR multiple combinations of all of those things to find exploitable opportunities, or mispricings, to be a form of investing. At the end of the day, making a buck is the goal. Then growing that buck. To me, value investing is just as much about exploiting mis-pricings as it is about anything else. So when a bunch of situations occur that to me indicate too many fat kids on one side of the see-saw, sometimes all you have to do is wait for them to get off. Not for everyone, sure. Hard to quantify, sure. Maybe skill, maybe luck, maybe we never find out.

I've noticed, especially with some responses here, that some rather wear badges of honor "investing" in the tried and true, textbook ways, even if it means negative, or mediocre returns, than make money entertaining more unorthodox approaches. Different ways to skin a cat so to speak but many times, especially with the markets, pattern recognition is big. You have the fundamental analysis crowd, and the technical analysis crowd. You have some that try both. I try not to box myself in, but rather prefer a "go anywhere" approach, if the situation makes sense.

This is a community and sharing potentially profitable ideas shouldn't be attacked. I've seen bozos with one post come here and post promo shit about penny stocks. And they get attacked, sure... I get that. But whining and sour grapes(over an idea that made money nonetheless) because the idea doesn't fit YOUR model of "investing" is stupid. No one is forced to follow, read, or invest. If people don't like it? Then move on...


EDIT: I'd add, back to MDXG, as an investor, I don't know how this whole thing isn't fascinating to people. At some point probably in the next 6 months, there will be a massive amount of money to be made on one side of this trade, for fundamental reasons. Why wouldn't it be worth keeping tabs on or trying to figure out what side that money will be made on?
Title: Re: MDXG - MiMedx Group
Post by: BG2008 on January 09, 2019, 09:39:02 PM
Investing is kind of like poker.  Overtime, you learn to calibrate each other.  A wise fellow on this board told me years ago that I was pretty good in real estate.  He also correctly pointed out a few others who do good work in specific industries.  I think I learned a bit more about some of you guys via this thread. 
Title: Re: MDXG - MiMedx Group
Post by: alwaysdrawing on January 13, 2019, 04:35:17 PM
Ultimately, what's left of this situation is a black box, and I still would advise folks who haven't been involved previously here to stay away.  Without good financial information, including cash on hand, legal expenses and audit expenses, DOJ/SEC liabilities, and much of any communications with shareholders, there is little to base any judgment on, except what caused the collapse from $17/share to $2/share in a year.

Prescience Point's presentation makes some good points, and my two cents is that there is a viable business within MDXG, however, they are too much discounting the legal and accounting costs, as well as any civil and criminal liability that the company has.  The auditor resignation is a big sign of the extent of those problems, as the restatement costs are fantastic fees for accountancies, and it takes an extremely bad situation to cause an auditor to resign using such strong language.  If Prescience Point was correct that the problems have been overstated, I don't see how that meshes with the auditor resignations.  The economics of the business are not as rosy as Prescience presents, as share based compensation to employees (as well as potential bribes to practitioners) are much different at higher share prices and with the current evidence of impropriety. I also think it's early to judge what, if any the civil and criminal liabilities are without any disclosure of resolution.

With that said, I'd agree with Prescience that the equity represents an option, where the downside is 0 in the event of bankruptcy, and possibly multiples of the share price if there are no further issues and what issues exist can be resolved at minimal cost.

My guess is that post-bankruptcy, MDXG can reorganize into a smaller entity with reasonable economics, and I suspect that the current holders will not be the beneficiaries of that.  I still expect that bankruptcy will be coming sooner rather than later to protect the company from the liabilities that they face, that are mostly not reflected on the most recent balance sheet, which is a year stale.

I do have a long-term position in puts on the company, that expires in January 2020, and which cannot be traded except to close the position.  I do not have any other short position, and haven't been trading in and out of the name, except to close some December 2019 puts before expiration.  As new put positions can't be opened, I don't have any trading advice except to say:  be careful out there.  Some people know how to trade in and out of these situations profitably, but I do not, and although I see the common stock equity as an option in this situation, I think the odds are stacked against it paying off.  With such little disclosure, I can't be sure what is actually going on at the company right now, and I'm not sure that many do besides insiders, and even they cannot see the other side of the table at the SEC and DOJ.

Title: Re: MDXG - MiMedx Group
Post by: Gregmal on March 19, 2019, 08:30:08 AM
This is now a multi bagger from the 8K heard 'round the world that many called the worst they'd ever seen and claimed was the death knell.

For myself, unfortunately I did not have the discipline to see this through entirely. But just goes to show following the crowd can be dangerous and blind people to opportunities. I mean at one point this was priced as though bankruptcy and judgments/penalties were known and appeals were exhausted when anyone with an understanding of the legal process knows at best, it would be 6-12 months before any of that even starts to occur.
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on May 30, 2019, 11:09:25 AM
https://seekingalpha.com/pr/17528684-mimedx-announces-comprehensive-board-refreshment-plan-cooperation-prescience-point

Fraud going to zero, right?
Title: Re: MDXG - MiMedx Group
Post by: benhacker on May 30, 2019, 11:28:05 AM
https://seekingalpha.com/pr/17528684-mimedx-announces-comprehensive-board-refreshment-plan-cooperation-prescience-point

Fraud going to zero, right?

With comments like this, might be best forum hygiene to state whether you have a position, and what variety.  My 2 cents (no position).
Title: Re: MDXG - MiMedx Group
Post by: cameronfen on May 30, 2019, 04:16:28 PM
https://seekingalpha.com/pr/17528684-mimedx-announces-comprehensive-board-refreshment-plan-cooperation-prescience-point

Fraud going to zero, right?

With comments like this, might be best forum hygiene to state whether you have a position, and what variety.  My 2 cents (no position).

Just to defend greg.  He did say he was long and then sold out.  Also in the context of this thread both longs and shorts pretty much admitted this was either a multibagger or a zero, so his comment was not all that controversial.   
Title: Re: MDXG - MiMedx Group
Post by: Cigarbutt on November 10, 2019, 08:06:10 AM
Follow-up and some kind of reflection on the state of healthcare in the US.

Disclosures:
-I think the US in this space does things that are great but also that are not so great.
-This analysis is based on an individual appreciation of the fundamentals and (like in the VMD thread where it appears that I was wrong or early which can sometimes be equivalent) being right on the process does not preclude the possibility to make a lot of money as MDMX equity has done really well since the introduction of the topic.

The emphasis here is not about the accounting and reporting red flags, it's about the fundamental value of the products. There has been considerable delay with various disclosures and some entities are ready to finance the rough patch so here are some relevant numbers for this post.

                                                                                2014          2015          2016
Total sales                                                                 118.2         187.3         245.0
-sales from wound care                                                93.6         141.1         184.0
-sales from 'surgical' products and to MD offices             24.6          46.2           61.0
(injectable stuff)

For the wound care, the growth is impressive but the placental, amniotic and umbilical cord products' effectiveness is based on poor and inconclusive evidence and many trials are sponsored and targeted "to support coverage and reimbursement".
For the injectable stuff, the same conclusion applies and the evidence is even weaker.
This has been discussed even in mainstream investing publications:
https://www.wsj.com/articles/va-bans-injectable-wound-care-products-from-mimedx-and-other-companies-for-many-uses-11560529012

I recently (yesterday) came across a report which was quite certainly not sponsored and takes a look, from the research angle, at how incentives could interact with the true efficacy of the product. The study covered the 'alternative' options used by relevant MDs in South Florida when dealing with a significant part of the addressable market (knee pain). The medical clinic revenue per patient if treated with a standard cortisone shot = $188.54. The medical clinic revenue per patient if treated with stem cell therapy-type of injection = $1200 to $6000, with a mean of $3100 and often a requirement for cash-only payments. One has to deduct the cost of procurement of the product which is different in both cases. In Canada, moderate efforts could obtain the products for about 5-10 bucks and, given the typical cost differential for the exact same items, in the US, I assume the cost could be in the $20 to 30 USD range. Because of the opaque nature of the 'alternative' market, it is hard to obtain and assess the impact of the cost of the stem cell therapy product. Very reasonable assumptions however suggest that the clinic/MD can multiply the revenue and exponentially multiply the bottom line by using a product backed with questionable evidence at best. What would you do and what does it mean for the value of the stem cell products?

The US is a great place for innovation (and also a great place for excesses). In the nineteenth century, the US was the place where innovation and entrepreneurs of various sorts allowed to be at the forefront for the development of the petroleum industry as we know it today. This was a revolution and started really when kerosene was developed to replace whale oil and lard as the primary source of light. But the 'product' initially was destined for a completely different market and the FDA did not exist but one has to wonder if the FDA really exists today. The adventurous Samuel Kier played a role and made a lot of money with the transformation but his adventure started by using the salt mine contaminant (I guess like the discarded placentas story of today) and selling it as petroleum syrup famed to cure just about anything, including "rheumatick" complaints. The evidence used by Mr. Kier was formed when he discovered that the product was prescribed for his wife who suffered from tuberculosis. The story does not say if the wife healed but the investor saw a profit opportunity. Mr. Kier then did not have to worry about the SEC or the FDA and used the following publicity:

"The healthful balm, from nature’s secret spring,
The bloom of health and life to man will bring;
As from her depths the magic fluid flows,
To calm our sufferings and assuage our woes."

All that to say that stem cell therapy offers great promises which are likely to come from a direction that remains, to this day, at the margin of acceptable and known evidence. What disturbs me tough is that the margin of clinics in South Florida offering and recommending the 'alternative' stem cell therapy was 24.5% and 58% of those clinics were not transparent on price. When reading about the early development of the oil industry and the role that Mr. Kier played in it, I learned a new expression which has been described as a euphemism for a specific kind or marketing.
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on November 26, 2019, 11:53:33 AM
https://www.streetinsider.com/Corporate+News/MiMedx+Group+%28MDXG%29+Confirms+%241.5M+Settlement+with+SEC/16182232.html

L.O.L....

"The SEC says the company agreed to pay $1.5M to settle the case, without admitting or denying wrongdoing."

But as usual, everyone missed the forest for the trees. Fraud = Zero, right?

Title: Re: MDXG - MiMedx Group
Post by: Cigarbutt on November 26, 2019, 12:41:32 PM
https://www.streetinsider.com/Corporate+News/MiMedx+Group+%28MDXG%29+Confirms+%241.5M+Settlement+with+SEC/16182232.html

L.O.L....

"The SEC says the company agreed to pay $1.5M to settle the case, without admitting or denying wrongdoing."

But as usual, everyone missed the forest for the trees. Fraud = Zero, right?
This story is above my abilities in terms of feeling where the wind is going but it continues to be quite entertaining. It must be tough to be a short seller looking for catalysts but this story may have several chapters as I understand that some people still have qualms about other allegations including the value of the underlying 'products'. FWIW, the FDA and other authorities have decided to look into some of the innovative stem cell related products. This process will evolve over some time and perhaps a few years and will, at least initially, be a positive as there will be an increased interest. The potential negative is that the fundamental value of the products may end up with a clearer definition in terms of efficacy. I thought Mr. Nocera did a good job reviewing the game dynamics of this story and the third link (with an attachment) may be interesting for those who have an interest in forensic accounting or who actually shorted the stock during the eventful period.
https://www.bloomberg.com/opinion/articles/2019-08-19/short-seller-marc-cohodes-goes-too-far-in-mimedx-campaign
https://www.bloomberg.com/opinion/articles/2019-08-22/mimedx-has-changed-but-short-sellers-like-cohodes-can-t-see-it
https://www.justice.gov/usao-sdny/pr/former-chief-executive-officer-and-chief-operating-officer-publicly-traded
Title: Re: MDXG - MiMedx Group
Post by: Gregmal on November 26, 2019, 01:02:22 PM
https://www.streetinsider.com/Corporate+News/MiMedx+Group+%28MDXG%29+Confirms+%241.5M+Settlement+with+SEC/16182232.html

L.O.L....

"The SEC says the company agreed to pay $1.5M to settle the case, without admitting or denying wrongdoing."

But as usual, everyone missed the forest for the trees. Fraud = Zero, right?
This story is above my abilities in terms of feeling where the wind is going but it continues to be quite entertaining. It must be tough to be a short seller looking for catalysts but this story may have several chapters as I understand that some people still have qualms about other allegations including the value of the underlying 'products'. FWIW, the FDA and other authorities have decided to look into some of the innovative stem cell related products. This process will evolve over some time and perhaps a few years and will, at least initially, be a positive as there will be an increased interest. The potential negative is that the fundamental value of the products may end up with a clearer definition in terms of efficacy. I thought Mr. Nocera did a good job reviewing the game dynamics of this story and the third link (with an attachment) may be interesting for those who have an interest in forensic accounting or who actually shorted the stock during the eventful period.
https://www.bloomberg.com/opinion/articles/2019-08-19/short-seller-marc-cohodes-goes-too-far-in-mimedx-campaign
https://www.bloomberg.com/opinion/articles/2019-08-22/mimedx-has-changed-but-short-sellers-like-cohodes-can-t-see-it
https://www.justice.gov/usao-sdny/pr/former-chief-executive-officer-and-chief-operating-officer-publicly-traded

Indeed. They say Cohodes went too far, and I agree with regard to the investment. You can see it today with his cheerleading even though, shorts have gotten blown up here(of which I presume he is still one). So obviously it is more emotional than financial, and given what Marc went through, I completely sympathize with him and kind of give him a pass for his behavior. The rest though, from both long and short side, I found to be disgusting. One of the things that unfortunately weighed on my decision to exit this early was in fact the vitriol and rhetoric here; something I was completely unaware of when posting the thread and something I only started seeing afterwards. With further due diligence, looking at other forums and platforms it became apparent to me that this was just a mess. Longs threatening shorts, shorts threatening longs...pieces of shit all around. Investing should be fun and like any other event in life, when its not, its time to move on. When people cant even have an opinion or investment thesis without being attacked, well, thats reprehensible to me and not something I wish to(publicly) be a part of.

The writing was on the wall though. The SEC literally never puts companies out of business, so betting on zero was obviously a bad bet. As usual though, people tend to focus on the wrong things. A simple observation is that when EVERYONE is focusing on something, that something really doesnt matter anymore because its likely priced as efficiently as possible. Like when everyone(myself included) was railing on Apple's reliance on the iPhone, well, iPhone numbers didn't matter anymore because the price reflected that. Same was the case here with the restatement. Now, its a little murkier as you allude to. I think the event driven trade is over and now one needs to be an expert on something here to make money.
Title: Re: MDXG - MiMedx Group
Post by: Cigarbutt on November 26, 2019, 03:02:02 PM
^Just a small add-on because it may not have been picked up by the market. The market for 'biologics' can be separated in different categories but the platelet-rich stuff contains a comparable profile of 'factors' versus the placental stuff. There have been interesting studies that came out recently that are shining a light at the murky picture. The last one I've seen is a well done study comparing the injection of factors with the injection of nothing in a context of 1-a recent injury, 2-direct injection at injury site and 3-looking for repair potential only and not regenerative potential for degenerative conditions which would be much harder to achieve, an ideal context to show any benefit, if there is one.
https://www.ncbi.nlm.nih.gov/pubmed/31748208?dopt=Abstract
In a transparent world, how much would you pay for zero benefit?
Title: Re: MDXG - MiMedx Group
Post by: Spekulatius on November 26, 2019, 03:34:55 PM
My own opinion is that MDXG product are probably not providing any benefit, but I am not an expert on this.

Mark Cohodes is in this short not for the money ( as he stated in the Jolly Swagman podcast), but out of principle and this has become a very personal vendetta.

So if you are in the market to make money, it’s probably best to stay out of this. anyways, even with frauds or worthless junk, the stock price can become very disconnected from reality.

I jokingly said for example, that the best time to invest in SHLD was after it filed. The stock went from $0.25 to ~$2.5 briefly after they filed. Similar, GM stock during the financial crisis showed either immediately before of after bankruptcy (about Nov 2008) a strong run, even thought the stock was basically known to be worthless. I think it was solely due to technicals and got a lot of shorts wailing.

So weird thing can happen and it is possible to do counterintuitive gambles where the payoff can be quite large in stocks that are absolutely worthless.