MSP Recovery (NASDAQ: LIFW) has been on quite the rollercoaster ride, defying gravity with over 400% gain since September 14th, 2023 with over 240% of that gain happening this week alone. However, the exact reasons behind this meteoric rise remain elusive. Typically, when a company drops major news, you’d expect an instant stock reaction. But in this case, the last significant update from the company was about a week ago, and it’s questionable whether that news was much on the positive side, yet the stock is still zooming upwards.

Background:

Let’s delve into the nitty-gritty of what MSP Recovery, more prominently known as LifeWallet, is all about. Imagine them as the healthcare financial detectives, diligently sifting through the complexities of medical billing and reimbursements. They specialize in recovering money owed to healthcare providers. If an insurance company owes a hospital for a patient’s treatment, these folks ensure that the hospital gets the rightful compensation. But their innovation doesn’t stop there.

Enter “LifeWallet,” their brainchild—a powerful tool designed to revolutionize healthcare transactions. Picture it as a savvy assistant for healthcare professionals, standing by their side in the hustle and bustle of medical care. LifeWallet’s magic lies in its ability to decipher the complexities of healthcare billing and insurance. It guides doctors and hospitals, helping them navigate the tangled web of who should foot the bill, especially in post-accident treatments. It’s a digital ally ensuring fair compensation and smooth financial transactions in the intricate healthcare landscape.

Subscribe to Microcapdaily.com Right Now by entering your Email in the box below. 

MSP is making waves in the healthcare domain with this innovative approach, leveraging data analytics to streamline processes and champion fair compensation for healthcare providers. Much like a rollercoaster ride, their journey promises excitement, surprises, and an undeniable thrill in the world of healthcare finances.

Legal Battles and CEO Extravagnce:

Step back and look at their stock chart—MSP has taken a major hit in value this year, and it’s not without reason. Surprisingly, digging into the company’s operations revealed some unpleasant surprises we hadn’t anticipated. It’s been a rough ride for them.

The company was just recently involved in a class action law suit led by recognized leader in shareholder rights litigation, Robbins LLP. The case revolved around MSP not providing essential information to investors transparently.

There were a number of claims mentioned, here’s a quick list.

1. MSP didn’t reveal there was an ongoing investigation by the SEC and federal prosecutors.
2. They gave out financial information to investors that was significantly wrong and deceptive.
3. When admitting they needed to fix their financial results, they didn’t reveal the full extent of the issues.
4. MSP couldn’t financially handle the claims they were assigned to manage by a major health and engaged in deceitful actions with said provider
5. The Registration Statement had lots of wrong or misleading statements and was poorly prepared.
6. Their Proxy also had false or misleading statements.

It all started on July 31, 2023, where The Miami Herald unveiled significant revelations. Stating the CEO John H. Ruiz has been living quite the lifestyle buying several waterfront mansions in Miami, even an entire Boeing passenger jet.

It’s not surprising the Ruiz’s lifestyle was so extravagant considering LifeWallet was once valued at more than $32 billion, but as you can see the company is now worth a small fraction of that. That said, Ruiz’s expensive lifestyle would be tough to continue.

Then again, on August 1, 2023, the Company made disclosures to the SEC (Form 8-K), confirming The Miami Herald’s findings. The stock took another substantial hit, dropping over 12%. Adding to the unfolding drama. After that, a substantial $67 million lawsuit was filed against the Company on the same day, resulting in an 18% plummet in the stock price.

The narrative continues on! On August 17, 2023, MSP acknowledged a notification letter from Nasdaq’s Listing Qualifications Department. They confirmed the Company’s non-compliance with Nasdaq’s Rule 5250(c)(1) due to a delayed Form 10-Q filing for the period ending June 30, 2023. This revelation caused a 19% stock price drop over two days.

With that said, we’ll bet you’re seriously wondering how could this company could possibly see recovery (pun intended) after all these allegations were laid out.

What happened:

Surprisingly enough, it seems Robbins LLP just recently lost the case against MSP and there was an announcement made on September 13th, 2023 about it. All those allegations have vanished into thin air. It’s baffling how a company with so many strikes against it can seemingly wrap things up so quickly. The whole situation leaves us questioning what’s really going on.

Since the announcement the other week, the company’s valuation has skyrocketed, at some points even peaking at an increase of over 400%. Naturally with that kind of trading action, it’s no surprise day traders are getting in on the action. MSP is trending all over Twitter amongst notable users like @timothysykes, @stockplaymaker1, and @AngryRed316 talking about it.

At this point, it looks like investors are basing their trades more on chart patterns and less on the company’s solid financial footing. MSP didn’t deliver great news in its latest earnings report, showing quite a large net loss of over $400 million. It’s quite likely the allegations had a role to play in this financial blow. The real question is if MSP can get its act together, start making real profits, and avoid a chapter 11. Either way, we’ll continue to follow along to see how things pan out!

We will update you on LIFW when more details emerge, subscribe to Microcapdaily to follow along!

Disclosure: We have not been compensated for this article/video. MicroCap Daily is not an investment advisor; this article/video does not provide investment advice. Always do your research, make your own investment decisions, or consult with your nearest financial advisor. This article/video is not a solicitation or recommendation to buy, sell, or hold securities. This article/video is our opinion, is meant for informational and educational purposes only, and does not provide investment advice. Past performance is not indicative of future performance.

Picture geralt by from Pixabay.com

• Solowin Holdings (NASDAQ: SWIN) has been making headlines this week, with its stock price soaring by an impressive 94% since Monday, September 18th, 2023. This surge follows the company’s announcement of their IPO on September 6th, 2023. Despite the lack of recent filings or news updates, the stock continues to experience significant gains, and the trading frenzy shows no signs of slowing down. It’s a puzzling situation, and if you’re following this, you might be feeling a bit bewildered. Interestingly, this kind of rapid and exaggerated performance is not necessarily unusual. We’ve seen similar behaviour with others last summer, AMTD Digital (NYSE: HDK) and Top Ships (NASDAQ: TOPS) to name a couple.

About Solowin Holdings:

Before we get into what’s happening and why, here’s a little background on the company based on the prospectus and “About” section in their latest press releases.

Solowin Holdings is a Hong Kong-based brokerage firm focused on Chinese investors. They offer a wide range of financial products and services through a secure and user-friendly online platform. They are licensed by the Hong Kong Securities and Futures Commission for various services. Their platform provides access to over 10,000 securities and their derivatives on major exchanges like HKSE, NYSE, Nasdaq, Shanghai Stock Exchange, and Shenzhen Stock Exchange. The company is known for its financial strength and technical expertise, serving both individual and institutional investors in Hong Kong and earning recognition from users and industry experts.

Subscribe to Microcapdaily.com Right Now by entering your Email in the box below.

It’s important to note that Solowin is not an operating company, but a Cayman Islands holding company with operations solely conducted by its subsidiary, Solomon JFZ (Asia) Holdings Limited, a limited liability corporation incorporated in Hong Kong.

Does it sound kind of fishy? Maybe… But is that enough to stop you from making a trade based off the intense retail hype we’re seeing during after hours trading on September 21, 2023? We’ll let you decide, but as per usual, always do your own due diligence. Stocks like these could cost you, and come with a significant amount of risk.

Thoughts from Retail:

Upon our initial research, the first thing we noticed was a notable user off Twitter, “MayaTrades” who started talking about the company’s potential earlier this week.

The user has since spoken on multiple occasions about the potential short squeeze the stock offers and suggests that it could continue to trade parabolically tomorrow on September 22nd, 2023. So it could be worth keeping an eye on to track the technicals.

We stumbled upon another user’s testimonial praising Maya’s day trading approach, claiming they’ve made over $15,000 using it. However, it’s essential to keep in mind that such testimonials endorsing various trading strategies are abundant on Twitter. It’s wise to approach these claims cautiously and form your own conclusions based on thorough research and analysis.

The general idea is that the shorts on SWIN are quite substantial, according to one user off Twitter, it’s 150% of the entire float and the stock hasn’t even seen the start of the squeeze yet. If it’s already gained over 90% in four days, I’m sure you can do the math on what this user is suggesting could happen next.

“Spec play that I have a lotto sized position in. It’s China. Cashed up for 5 years, allegedly. 2M float / 14M OS. I believe insiders will run it at some point, so whether it’s weeks or months, I’m holding a small position as it mirrors the other crazy China IPO runners. Currently $2.65” stated MayaTrades on September 14th, 2023.

We’re continuing to see the narrative of “No reason to close position with the strength SWIN is seeing into close” and that it’s seen “Unbelievable strength in a bloody market”. If you look at the technicals, you can see that it flagged into close yesterday and continued with the same pattern today.

Many also believe that the company has not only overcome previous resistance levels, but also surged beyond expectations in after hours trading September 21st, 2023. The stock just recently surpassed the $5 mark, leaving the future trajectory in the upcoming trading days quite unpredictable. This rapid movement follows a trend of consistently breaking through crucial resistance levels.

Once again, it’s important to acknowledge the speculative nature of these trades, with the possibility of a complete loss of investment. However, given the heightened retail interest surrounding the stock this week, we found it relevant to take note, delving into the factors and conversations driving this wave of excitement.

Short Squeeze:

By now, it’s safe to assume that most people are familiar with the concept of a short squeeze. We’ve covered it in several previous articles. However, if you’re new to the market or unfamiliar with our daily articles, here’s a brief explanation below:

A short squeeze is a market phenomenon where the price of a stock or other asset increases rapidly and significantly. This can be triggered by a surge in demand for the asset, often caused by a large number of investors who had bet against the asset (short sellers) rushing to buy it to cover their positions and limit their losses.

Short Selling: Short selling is a trading strategy where an investor borrows shares of a stock from a broker and sells them on the market, anticipating that the stock’s price will decline.

Betting Against the Stock: Short sellers profit when the stock price falls. They aim to buy back the shares at a lower price later to return them to the lender (broker), pocketing the difference.

Potential Losses and Squeeze: However, if the stock price starts to rise instead of fall, short sellers face potential losses. As the price climbs, they may feel pressured to buy the shares back to cut their losses, adding to the buying pressure in the market.

Buying to Cover: To exit their short positions, short sellers buy shares (covering their shorts) on the open market. This buying activity further drives up the stock price, as demand increases.

Feedback Loop: As the stock price rises due to increased buying from short sellers trying to cover their positions, it can trigger more short sellers to cover, creating a feedback loop of buying and price escalation.

Rapid Price Increase: The sudden increase in demand can lead to a sharp and swift rise in the stock price, catching short sellers off guard and forcing them to buy at higher prices to close their positions.

Magnitude and Duration: The extent and duration of a short squeeze can vary. It could be a short-lived spike or a more prolonged increase in the stock price, depending on the level of short interest, overall market conditions, and the availability of shares for shorting.

Short squeezes often attract significant attention and can result in substantial gains for those holding long positions, while causing substantial losses to short sellers, further fueling the market dynamics.

We will update you on SWIN when more details emerge, subscribe to Microcapdaily to follow along!

Disclosure: We have not been compensated for this article/video. MicroCap Daily is not an investment advisor; this article/video does not provide investment advice. Always do your research, make your own investment decisions, or consult with your nearest financial advisor. This article/video is not a solicitation or recommendation to buy, sell, or hold securities. This article/video is our opinion, is meant for informational and educational purposes only, and does not provide investment advice. Past performance is not indicative of future performance.

Picture by sergeitokmakov from Pixabay.com

Elutia Inc (NASDAQ: ELUT) shares bolstered a whopping 33% today as the company recently shared that they’ve secured about $10.5 million in funding through a private investment round. If all the warrants are cashed in as part of this funding, the total could go up to $26.2 million.

Latest Changes:

Just last week, Aziyo Biologics changed its name to Elutia Inc. Following this change, Elutia made an announcement about selling its Orthobiologics business unit to Berkeley Biologics, a subsidiary of GNI Group Ltd. This move is set to bring in a substantial amount of cash, totalling up to $35 million for Elutia. This sum includes a notable upfront payment of $15 million, plus additional potential earnings of up to $20 million over five years. The deal is expected to be finalized in the fourth quarter of 2023.

This sale is a big step for Elutia, especially in the realm of drug-eluting biomatrix technology (DEB). Elutia is actively seeking approval from the FDA for their main product, CanGaroo RM. This product utilizes innovative biomatrix technology with antibiotics rifampin and minocycline (RM), providing long-term protection for cardiac pacemakers and defibrillators. This tackles a huge market estimated to be worth around 600 million. Elutia is aiming to introduce CanGaroo RM to the market in the first half of 2024.

Subscribe to Microcapdaily.com Right Now by entering your Email in the box below. 

Standard Of Care:

Medtronic (NYSE: MDT) stands as the exclusive provider of the antibiotic envelope within the current market. This envelope is crafted using synthetic mesh infused with antibiotics. Back in 2014, Medtronic acquired this technology, making a strategic investment of up to $200 million. Primarily intended for Cardiac Implantable Electronic Device (CIED) revision procedures, this product boasts estimated annual sales in the range of $250 to $300 million.

However, despite its market presence and revenue generation, the Medtronic antibiotic envelope has notable limitations. While it effectively combats infections, its synthetic composition renders it less effective in supporting wound healing. Moreover, it poses challenges in accommodating larger devices like Subcutaneous Implantable Defibrillators (SCID).

Drug-eluting biomatrix (DEB):

Drug-eluting biomatrix (DEB) involves a specialized approach to drug delivery using a biomatrix as a carrier or platform. In simple terms, it’s a technique where a biomaterial matrix, often a biocompatible polymer or similar substance, is used to release drugs in a controlled and targeted manner.

The biomatrix acts as a support structure that can hold and gradually release drugs or therapeutic agents at a specific site in the body, typically over an extended period. This is particularly useful in medical applications where a localized and sustained delivery of medication is necessary.

For instance, in the context of Elutia’s CanGaroo RM, a biomatrix incorporating antibiotics rifampin and minocycline is used to provide prolonged protection for cardiac pacemakers and defibrillators. The biomatrix slowly releases these antibiotics at the surgical site, preventing infections and promoting healing.

DEB technology is gaining traction because it enhances treatment efficiency by ensuring the drug is delivered directly to the target area, minimizing side effects, and optimizing therapeutic outcomes. It’s a promising approach in the field of medical advancements, especially in areas like cardiology, oncology, and orthopedics.

Post-mastectomy Breast Reconstruction:

On top of this, the company also has plans to develop an RM version of its SimpliDerm biomatrix tailored for breast reconstruction procedures. The rate of infections after this surgery is quite high, more than 10%, highlighting a big medical need in a market valued at over $500 million. Elutia is stepping up to address this issue by developing SimpliDerm® RM, which incorporates their unique DEB technology. The funds raised through the private investment round (PIPE) and the sale of the Orthobiologics business unit will not only boost Elutia’s efforts in advancing their drug-eluting biomatrix products for the cardiac pacemaker and defibrillator market, but also for post-mastectomy breast reconstruction.

What’s next:

As mentioned earlier, their biomatrix platform serves two major markets. CanGaroo RM, their upcoming product, is slated for a 1H of 2024 market release and is poised to be a pioneer in a $600 million market. Furthermore, their SimpliDerm RM product utilizes the same proprietary antibiotic-eluting technology found in CanGaroo RM, which serves a 1.6B market according to their presentation deck. They aim to secure an IDE by Q4 2024, and upon achieving these milestones, they plan to venture into neurostimulator markets, particularly in pain management, to further drive their growth.

We will update you on ELUT when more details emerge, subscribe to Microcapdaily to follow along!

Disclosure: We have not been compensated for this article/video. MicroCap Daily is not an investment advisor; this article/video does not provide investment advice. Always do your research, make your own investment decisions, or consult with your nearest financial advisor. This article/video is not a solicitation or recommendation to buy, sell, or hold securities. This article/video is our opinion, is meant for informational and educational purposes only, and does not provide investment advice. Past performance is not indicative of future performance.

Picture by sasint from Pixabay