Streetsweeper Goes Negative On Second Sight, Says These Risks Are 'Eye-Opening'
Shares of Second Sight Medical Products Inc (NASDAQ: EYES) surged higher on Monday after the company's medical technology was featured in a preview in an upcoming Vice documentary. However, shares tumbled on Wednesday after the company received some negative press in the form of a TheStreetSweeper report.
TheStreetSweeper's Sonya Colberg noted that Second Sight's "15 minutes of fame" won't be sufficient to "change the very real issues" that could reverse the stock's ongoing momentum.
Colberg continued that Second Sight has been "unusually busy" with eight separate press releases since November 24. She added that the while a promotion on Vice's episode is "serendipitous," the "vigorous promotions are not" as the company may be pushing out news releases ahead of a "potentially dilutive " stock offering.
Meanwhile, Colberg pointed out that Second Sight sold only 15 of its Argus II systems in the third quarter at a price tag of around $148,000 each.
"That's not surprising," Colberg explained. "As it turns out, patients can't just get fitted and suddenly see like a 20-year-old. Elderly patients must learn to interpret information from the device in an ordeal so challenging the FDA user manual goes into length describing the potential problems and a long list of possible side effects."
Finally, Colberg stated that Second Sight's stock hasn't "lived up to expectations" and only one Wall Street analyst covers the stock. Amit Dayal of HC Wainwright places an "outlandish" price target of $21 per share and his ratings have generated "terrible" returns, based on Bloomberg data that Colberg cited.
Colberg concluded that Second Sight's stock is "extremely risky" and that it will "plunge to a reasonable valuation of $2.50 per share."
The owners of TheStreetSweeper hold a short position in Second Sight.
Latest Ratings for EYES
|Mar 2016||Rodman & Renshaw||Maintains||Buy|
|Jul 2015||Rodman & Renshaw||Initiates Coverage on||Buy|
|Jul 2015||H.C. Wainwright||Initiates Coverage on||Buy|
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