TransEnterix Moving Down As StreetSweeper Calls Company 'Operational Disaster'

Shares of Transenterix Inc TRXC hit an intra-day low of $3.30 on Friday, but quickly rebounded to trade nearly flat on the day following a report by The Street Sweeper.

According to The Street Sweeper's Sonya Colberg, TransEnterix investors should "consider running away, screaming from this operational disaster."

Colberg argued that the medical device company's history began when it paid $94 million for "a tiny company [SafeStitch] offering virtually no sales, no prospects, nothing really beyond multi-millions in losses."

Colberg added that SafeStich recorded $35,000 in sales in 2012 and total losses of $29.5 million. In addition, TransEnterix hasn't earned a profit since its inception but the company's top three executives earned a collective $2.6 million in 2014.

"The chief financial officer's 2014 compensation alone exceeded $1.4 million," Colberg expanded. "All for handing investors pathetic sales and growing losses."

Colberg also noted that TransEnterix's stock price is "heavily driven by aggressive hype" by promoters and message boards.

Bottom line, Colberg concluded that TransEnterix's stock is trading at a valuation that implies it offers a "marketed, readily accepted product." However, "nothing could be further from the truth" and "there's nothing but downside from here."

The owners of TheStreetSweeper hold a short position in TRXC.