by Anura Guruge
Yesterday I talked about the Vatican/Pope investing US $1 Million in a publicly traded US company NeoStem [stock ticker NBS] that does adult stem cell research. When I had a quick look at the stock performance chart for 2011 I was quite surprised to see that after a small ‘pop’ on the pope news in June, the stock had tanked. [That it was listed on AMEX rather than NASDAQ also caused my nose to twitch. Hhhmmmm.]
Given that in my priorities in life, contrary to what people believe, my interest in the stock market far exceeds my fascination with popes, this morning I decided to do some more research into NBS. At 65 cents the stock is cheap — such a price typically indicating a distressed stock. Basically penny shares. The stock appears to have dropped from around US $1.50 to $0.65 since the pope’s injection of $1 million. I call that Reverse Midas touch.
That is a 56% drop since the pope showed interest. So the $1 million is now down to $460,000 — though to be fair it could explode from there, IF there is a big breakthrough. I just find it very strange that the stock isn’t ticking UP given all the media coverage it got just this weekend — especially the joint conference at the Vatican in November.
You could genuinely argue that if you are a contrarian, this is the ideal time to jump into this stock. Lets face it, at this price you could buy a few hundred and not even notice that you spent any money on stock.
I also noticed that the company has an acute shortage of MANAGERS. On my research, they show 8 executives, but these 8 posts are held by just 4 people, with the founder, Dr. Robin L. Smith, in the fore. Haven’t really worked out what her deal with the Vatican is. Not sure whether she is even a Catholic. I have read that it was her that cut the deal with the Vatican.
I am beginning to think that much of the negativity now associated with the company ACTUALLY might have to do something with the Vatican investment! Basically, others thinking, these folks are now going to be too hamstrung by the Vatican to do anything significant. I could be wrong. But, there is something wrong with this picture.
There is one last thing I want to mull over. US $1 Million is not even bagatelle to the pope or the Vatican. They, on average, seem to pay 4 times that to settle with the kids abused by priests. So investing $1 Million in NBS, to them, is akin to me forking out $1 to buy a scratch ticket. Loosing $500,000 is nothing to them … though I, given that I remember these things … realize that THIS LOSS is more than the total that the pope donated to the relief effort in Africa just last month! Amen.