Jul. 16 at 2:39 PM
$SKIN After reviewing the filings, I'm still constructive.
The company has roughly
$202M in cash, generated positive free cash flow, and recently received FDA clearance for SkinStylus.
The main overhang is the registered warrants. The new warrants have a
$0.975 exercise price, and about 11.8M shares are registered once the S-1 becomes effective.
Some selling pressure is possible after the EFFECT, but many holders are subject to 4.99% or 9.99% ownership limits, which may slow distribution.
At
$0.88, the stock is actually trading below the warrant exercise price, so a lot of the dilution concern appears priced in.
If management continues executing and revenue stabilizes, I think this has a favorable risk/reward setup.
Watching earnings on Aug. 6 closely.
About 129.6 million shares outstanding.
The EFFECT is for previously issued shares becoming eligible for resale. It does not create new shares.
If they paid
$0.97
$0.89, they're underwater.
They're generally less likely to dump stock.
= BUY
