For all the success we've had together and the countless recommendations along the way that have given you huge profit potential, we've hit a stinker.
To say I'm disappointed with Ekso Bionics Holdings Inc.'s (Nasdaq: EKSO) latest numbers would be the understatement of the year.
The company reported financial results for the first three months of 2017, and revenue dropped off a cliff from $8.5 million a year ago to only $1.4 million this year. Granted, last year's figures included recognition of a deferred $6.5 million worth of revenue due to an accounting change, but that doesn't change the fact that sales tanked.
What's happened and why makes sense to me given where they are as a company and the pivot to more commercially oriented products like the EksoZeroG, but I don't particularly like it. My expectations, like yours, were for substantially higher prices this far into things.
It would be easy to throw in the towel and I wouldn't blame you one bit if you did. But - and I've got to take a deep breath as I type this because I am acutely aware of the trust you place in me - I'm recommending you hang on if at all possible.
Doing so shouldn't be difficult if you've properly controlled risk by keeping your position to 2% of investable capital or used a series of lowball orders to average in, for example. If you're over that limit or losing sleep because of the way Ekso's trading, then think seriously about paring down your position until you're at more comfortable levels.
Looking ahead, the company still has a lot going for it despite some very tough numbers, including an $11.7 million financing that provides much needed working capital and a new director named Howard Palefsky who has valuable experience in the life sciences and wellness industries.
Most importantly, I remain confident in the company's leadership. It's apparent to me based on recent conversations with CEO Thomas Looby and CFO Max Scheder-Bieschin that both men are acutely aware of what they've got to do and how they've got to move the company to do it.
In that sense, the road that they've got to travel is very similar to other big names you know. For instance, investors forget that Apple Inc. (Nasdaq: AAPL) was on the verge of bankruptcy in 1996, yet has a valuation of nearly $800 billion today. That Texaco went feet up in the 1980s and is now part of Chevron Corp. (NYSE: CVX), which carries a $200 billion price tag. Airbnb's creators lived on cereal and today it's a unicorn with a $25.5 billion valuation.
Sometimes, that's what speculative recommendations like Ekso come down to. Either you believe in what they do or you don't. There is no middle ground.
However, for some stocks, there's definitely a "dumping ground."
That's the case for Snap Inc. (NYSE: SNAP), which tanked 23% in after-hours trading following earnings that failed to meet lofty expectations stemming from the "red-hot" IPO I urged you to avoid at all costs. And I'm glad I did, given that the company managed to lose a staggering $2.2 billion during its first 90 days as a public company...
...after the underwriters made hundreds of millions.
...after 26-year-old founder Evan Spiegel got a nearly $600 million bonus.
...after the markets gave the company a $6 billion haircut.
No doubt you see a pattern here, just as I do.
IPOs sound like a great deal because you're getting in ahead of the herd but, in reality, retail investors are almost always last in line.
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About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.