Investors are interested in biotech stock Amyris Inc (NASDAQ:AMRS), however, that interest is on buy side or sell side remains a mystery. For a moment in 2016, it appeared that shareholders were going to see their patience bringing rewards. The biotech stock surged to over $1 a share from almost $0.30 a share in time to avoid de-listing from the NASDAQ exchange. Then the stock commenced sliding back under the price level of $1.
The industrial biotech stock is increasingly confined in its financial flexibility. This won’t end well. A falling trend for the equity coincided with a sharp rise in short interest, as traders snatched on a relatively high stock price for another decline at some easy profits. While the recent earnings seemed to demonstrate signs of growth, and management is promising massive growth in 2017, shareholders are still betting big against company.
It is a known fact that dilution is never a solution. Short sellers have heaped on after price gain in the past, but the shares price was almost 300% higher the previous time over 5 million shares of AMRS were shorted. As per the last noted trading price, the stock sits around $0.540 range.
Poor management decisions, high production costs, the problem of scaling biology and production issues have all joined to breathe assurance in traders in past years. Those issues still continue to this day, but added problem has appeared in the past 2 years: runaway dilution. Counting from mid-2015, the count of shares unpaid has exploded from more than 80 million to 263 million.
The series reaction of dilution saw a halt when a massive debt rebalancing act in 2015 was released. At that time financiers accepted to convert debt into equity. Management anticipated that projected production surges soon afterwards would offer enough support to refinance the outstanding debt at more promising interest rates.