Melissa Davis, senior editor of The Street Sweeper, poses with celebrity stock picker Jim Cramer after a recent taping of his "Mad Money" television show. Davis worked as an investigative reporter for TheStreet.com, where Cramer serves as chairman, before assuming her current role at The Street Sweeper.
Blue Nile: Breaking Hearts – And Share Value
by Sonya Colberg, Senior Investigative Reporter, 11/20/2014 12:25:19 PM
Diamond seller, Blue Nile (NILE), is in the business of turning romance into cold, hard cash.
As if that isn’t tough enough, the Seattle, Wash. diamond and jewelry retailer is selling online. While the company’s courtship of customers is getting tougher, recent creative hype has blinded investors into buying into the dream and pushing the market cap to a stunning $400 million.
But this love story is doomed. Here are some highlights on why TheStreetSweeper believes the diamond company will quickly lose its sparkle once again:
*Diamonds are a girl’s best friend: Cheap won’t cut it.
NILE’s engagement business is at risk partially because a woman may feel a slight wave of disappointment when Prince Charming shows up with a diamond – and it’s from a Wal-Mart-esque online store.
NILE execs admitted during a summertime William Blair stock conference, in fact, that the biggest problem is getting men to buy engagement rings online because there’s “a trust component and then there’s a relationship component.”
CEO Harvey Kanter added, “I think that that -- the reason why growth rates haven't been sustainably high has been that we still have to get a lot of the market to understand that.”
*NILE’s recent “test:” Weakening business model.
Mr. Kanter said NILE is now “testing” a brick-and-mortar store in Rhode Island and in Seattle. This appears to be a test of the idea that customers may consider buying engagement diamonds online less satisfying and riskier than seeing and touching them in a store first.
Keep in mind that the reason NILE can sell jewelry cheaper is because, as an online company, it has been able to avoid the costs of physical buildings, utilities and sales people of traditional jewelry stores. And now it’s trying to compete in brick-and-mortar with thousands of established jewelry stores.
Receptos: A Bloated Highflier Dumped by Insiders Nervous about the Truth?
by Melissa Davis, 11/17/2014 10:25:12 AM
Receptos (Nasdaq: RCPT) looks even luckier than usual right now. The bleeding biotechnology firm has racked up such mind-blowing gains over the past few weeks, in fact, that even its own executives – who just dumped more than $35 million worth of the company’s highflying stock – must wonder how long its good fortune can actually last.
With its stock price recently exploding into the triple digits, making the company worth a staggering $2.9 billion years before it even hopes to seek approval of its very first drug, Receptos arguably looks priced beyond perfection at this point.
For starters, Receptos now owes more than a third of its lofty valuation to a Phase II study that barely even managed to achieve its primary goal. When Receptos issued a positive update about that ongoing trial a few weeks ago – sparking a wild celebration that expanded its market value by almost $1 billion in a single day – the firm actually provided enough underlying data to reveal that a tiny handful of patients happened to narrowly swing the results in its own favor.
Just pull out that announcement and grab your calculator. Once you complete a few simple equations, you’re bound to arrive at that striking conclusion yourself.
Start with the 199 patients that Receptos enrolled in its “Touchstone” trial, a Phase II study designed to test its leading drug candidate RPC1063 as a possible treatment for ulcerative colitis (UC), and then divide those subjects into three different groups: one for patients who received a “high” 1 milligram dose of the drug; one for patients who received a “low” 0.5 milligram dose of the same medication; and one for those who received an inactive placebo. Assume that Receptos made sure that its researchers distributed those subjects as evenly as possible, with 66.3 patients assigned to each arm of the trial. Now, you can estimate just how many patients actually recovered after taking the company’s experimental drug.
Of the patients treated with RPC1063 during the eight-week induction period of that clinical trial, only 16.4% of those who received the high dose and 13.8% of those who received the low dose – or the equivalent of 10.9 and 9.2 patients, respectively – achieved clinical remission to meet the primary endpoint of that ongoing study. Even so, the high-dose group somehow fared well enough to hit the primary endpoint of the study by achieving “statistically significant” positive results. In the second group, however, the recovery rate – lowered by just one or two patients – fell short of reaching that crucial goal.
Talk about a very near miss!
Who knows if RPC1063 really sent those patients into remission, either? After all, at least some of the patients who received nothing but a placebo actually wound up recovering on their own.
Company insiders have already struck it rich regardless. Unwilling to wait for Receptos to determine whether its experimental UC treatment actually works or not, a crowd of senior executives recently jumped at the chance to hit a surefire jackpot instead.
Earlier this week, nearly half-a-dozen members of the senior management team – including the CEO, the chief medical officer, the chief scientific officer, the chief technology officer and the senior vice president of corporate development – took part in a lucrative insider-selling spree that turned all of them into overnight multimillionaires. The biggest winner by far, Receptos CEO Faheed Hasnain walked away with a gigantic $21.9 million windfall that easily exceeded all of the multimillion-dollar fortunes collected by the remaining four executives combined.
JAMN Finally Spills the Beans -- And It's an Ugly Mess
by Janice Shell, 6/2/2011 10:32:51 AM
To be sure, the 10-K offered investors little reason to sing. For starters, the filing reveals, this once-hot “coffee company” sells no coffee of its own at all. JAMN relies on a supplier based in frigid Canada – far away from the tropical Jamaican home of its co-founder Rohan Marley – to provide the company with an actual product to sell to its customers instead.
Back in April of 2010, JAMN inked a “supply and toll agreement” with Canterbury Coffee of British Columbia that gave it access to some brew. According to that agreement, JAMN relies on Canterbury to fulfill every role – save a minor one – normally satisfied by a firm that classifies itself as a coffee company. Canterbury purchases the coffee beans. It roasts them. And it then packages them in bags supplied by JAMN – the company’s only real product – for sale to the public.
JAMN signed this deal more than a year ago, right before Shane Whittle – a notorious Vancouver stock promoter – officially resigned as CEO of the company. But the company never mentioned that agreement, seemingly material enough to warrant at least a quiet 8-K report, in a single regulatory filing until now.
Jammin Java (JAMN): Hot Stock ... Bitter Aftertaste?
by Janice Shell, 6/2/2011 10:30:25 AM
It’s time to wake up and smell the coffee! That’s exactly what Jammin Java (OTC: JAMN.OB), a heavily promotedcoffee company, and – for very different reasons – TheStreetSweeper would like investors to do.
Since the beginning of the year, JAMN has miraculously risen from the ashes of the “Grey Market” graveyard to become one of the liveliest – and richest – stocks in the entire microcap arena. JAMN has seen its stock shoot straight toward heaven, soaring from 55 cents to peak above $6 a share on massive daily volume, with its market value nowtopping $355 million despite the company’s limited resources and operating history. (As covered in more detail below, two of the Internet tout sheets pushing JAMN the hardest effectively vanished -- disabled by their Internet servers -- on the day the stock’s trading volume exploded past 20 million shares.)
CCME: Few Signs of Life at 'Healthy' Chinese Firm
by Roddy Boyd, 3/23/2011 9:30:34 AM
Also, and this cannot be understated, hanging out on a sidewalk in Fujian–the sidewalks double as parking spots when the streets, which appeared to have been designed in the Han Dynasty, fill up–was not a viable option. There was also the matter of the world-class headache the Financial Investigator was developing from Fuzhou’s diabolical smell, an epic conflation of poor sewage treatment, air pollution and the smell of cabbage that made getting the hell off Dongjie street a matter of vital importance.
The Financial Investigator and his traveling companion for the trip, an American investor with extensive experience in China, decided to head upstairs despite our interview with the CFO having been cancelled at the last minute (with no explanation given.) We thought a quick tour of the offices and meeting a few other executives might open our eyes to a few things.
Though the language barrier was a little steep with the young receptionist–when we asked for writing paper, she provided Kleenex–we were in short order shown to their conference room and told to wait. It did not escape notice that pride of place in the conference room belonged to a framed certificate of participation from the Fall 2010 Rodman & Renshaw conference, the World Cup for reverse merger companies and the pumpers and touts who peddle them.
Eventually chief operating officer James Yu came down and after spending 30 minutes trying to understand who we were, concluded that giving us a tour wouldn’t hurt. Soon enough, his colleague, Vinne Ye–the chairman’s assistant–came out and took us around.
It was most eye-opening.more...
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