On a 7.85 million share volume POSC stock price dropped down by 5.45% and closed at $0.052 yesterday. At the same time, the third for this year promotional disclosure was made and once again confirmed that POSC promoters have been well paid for pumping the share price up. The August promoter has come into action again and he is receiving $45,000 for his commitment.
But POSC stock price is going down even stronger, especially after the second quarter results were filed last Monday. In the financial report of the company the previously announced strategic alliance with Covidien (NYSE:COV) has been confirmed. Though the details still remain a mystery. The only thing that is officially known so far is that POSC will be an independent contractor and will design and develop a new version of its dose dispensing equipment specifically designed for use only with Covidien radiopharmaceutical products.
Investors must have decided that with a P/S ratio of over 20 the market has already been optimistic enough about POSC potential to grow the sales and were not willing to raise their price targets. Instead, the share price went down, even after yesterday some new hints have been provided to the investor community by a forum participant, who claims to have received an e-mail from POSC investor relations department.
The implications are that the company has huge growth plans related to the Covidien agreement and is working on other similar alliances. Thus, the story for the company’s next press release may have been provided, and as the April’s rush for POSC shares shows, it could be successful again.
The growth potential of POSC is highly questionable though. The company has never been profitable, the accumulated deficit is $111 million. During the first half of the year the revenues doubled, while the loss from operations got over seven times higher.
