BioTime Surges on Hedge Fund & Breakout
BioTime, Inc. [[BTIM.OB]] shares opened sharply higher after Broadwood Partners increased its stake in the company, according to a Schedule 13D filing with the SEC. The hedge fund received 35,143 shares on April 15, 2009 and now owns 3,208,546 shares, or approximately 12.1 percent of the company. However, the news is questionable fundamentally, since the shares were received as part of an agreement to extend a line of credit.
Technical analysts believe that BioTime was simply continuing its bounce off of the key 200-day moving average and lower channel trend-line and managed to gain momentum by breaking through the 50-day moving average and a triangle pattern. However, the stock now faces resistance from upper channel trend-lines, which could prove difficult to break through in the near future.
Late last month, BioTime reported a FY2008 net loss of $3,780,895, or $0.16 per share, on revenues of $1,503,792. Meanwhile, total cash and cash equivalents stood at just $12,279, which raises some big questions about the company’s ability to continue as a going concern. However, the company’s line of credit with certain private lenders increased from $1 million to $3.5 million giving it some room.
In the end, prudent investors may want to shy away from BioTime until it can post profitable results. However, the stock is great for short-term investors and technical traders as it has a lot of volume and liquidity when compared to most OTC stocks.
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