Zomedica (NYSEAMERICAN:ZOM) stock was said to be going “to the moon” on Reddit early this year. ZOM did zoom, to as high as $2.50 per share, twice.
Since mid-March the air has gone out of the balloon. ZOM stock is trading at about 58 cents. That gives it a market cap of $572 million.
For investors in the small vet medical test company in Ann Arbor, Michigan, time is passing very slowly.
Zomedica makes Truforma, a platform for testing animal blood. It’s based on Bulk Acoustic Wave (BAW) sensors from Qorvo (NASDAQ:QRVO), developed for use in defense and telecom applications. There are currently four tests or “assays” available for adrenal and thyroid conditions. Two more are on the way.
Waiting on Results
Time, measured by traders anxious for a profit, is different from time measured by vets looking at a device costing nearly $9,000 to start.
It would help if Qorvo had tests for gastrointestinal diseases that were promised a year ago. These are the most commonly insured condition for dogs. Truforma could deliver answers on these conditions at the point of care.
Instead, we have adrenal and thyroid tests. A fT4 test is due in September. An ACTH test is due two months later. All the company will say for now about the GI tests is that development work continues along with “many additional assays.”
Then there’s the question of the sales force. By the end of 2021, Zomedica says the sales group will have 15 reps. They will be supported by four professional services veterinarians and support employees. That’s at the end of 2021.
Ready for more bad news? The June results that were due Aug. 10 will now come out Aug. 17. In response one Redditor posted a picture, of actor Sylvester Stallone holding an actress’ arm over the edge of a helicopter. Another Redditor, familiar with the scene, responded “She go splat.”
No News is No News
Any investment consists of both money and time. The time is opportunity cost, the price you pay for not having the cash. For our Ian Cooper, the opportunity cost is too high on Zomedica. Mark Hake agrees.
That may be correct. The sales force is only now getting into the field. Tests that give the platform value are still in the pipeline. That value may be enormous, assuming the tests can be made.
Or it may go splat.
This is pretty much what I wrote a few weeks ago. The corporate time frame is out of whack with that of the speculators. You may easily be told on Aug. 17 to wait until third quarter results. In November you may be told to wait for fourth quarter results, or for the new assays to hit the market.
The Bottom Line
Whether you should get into ZOM stock, or stay in it, depends on how big a position you have and the opportunity cost of that investment.
If I’d gotten in at $2.50 and was looking at another six months (at least) before I could become whole, I’d seriously consider selling. If I were sitting on an investment of a few hundred dollars, made just a few months ago, I’d probably be sitting. Looking at Zomedica now, you can get 200 shares for the price of a good night out with a friend. If I had problems finding a date, I might buy ZOM stock.
But if I could find a date, I wouldn’t.
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On the date of publication, Dana Blankenhorn did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Living With Moore’s Law: Past, Present and Future, now available at the Amazon Kindle store. Write him at firstname.lastname@example.org or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.