Share duds

sevenhills

This share is up today. But it looks like a dud.
I like the Google finance charts, but why is the share price rising, when the company looks bankrupt?

Linton

You need to look at more detailed financial info.  Perhaps the company's liabilities are long term loans which will (or wont) be repaid when the company hits the big time.  It would not be surprising for speculative growth companies for example to have debts greater than assets.

As long as the company can pay the debts when they are due there is no problem.

Malthusian

It would help if you named the share...

MX5huggy

Looks like Amyris

sevenhills

Yes Amyris, its share price has been going up and down, around 0.7 but now up to 0.9

Linton

Before buying I suggest you look into its financial situation - https://investors.amyris.com/financial-information

Perhaps someone with accounting experience can comment further but my reading of the data as a non-accountant is that its sales are very low and it is spending its reserves on development.  That is the problem with biotech start ups.  Their R&D costs are very high, they have no money coming in, and most developments dont reach the point where they can be sold as products. So it's a race between going bust and developing something worthwhile.  Most times the money runs out first.

wmb194

I was going to ask whether it was a biotech; the thing is you cannot just look at the income and cash-flow statements and balance sheet, you need to understand, 'the story.' 

For instance, a biotech could receive FDA approval for a blockbuster drug and its fortunes could turnaround tomorrow but it's up to you to try to judge how likely this is. If it's a REIT that owns second-tier shopping malls on an inexorable slide you'd probably be best to avoid it.