Stellar Biotechnologies – The real deal or just more tulip bulbs?

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DISCLAIMER: I am long shares of SBOTF and may add to the position at any time.
”Even blind squirrels find an acorn every now and then”
OK, I know .. there is already plenty of discussion re Stellar Biotechnologies (SBOTF) on the site. Since Travis posted the tease from Nick Hodge in early July, the stock is up a hair over 100% (my Special Situation account sends many thanks for that one!). The reason I’m opening this thread is because the majority of comments from those of us interested or already invested in SBOTF are being posted under another wonderful – yet mostly unrelated – thread by Doc Gumshoe that talks about Alzheimers and possible causes/treatments/cures. Great stuff, but not fully germane to the topic of SBOTF. So, tho seperate the two discussions, I thought I’d try this so we can focus on each of the topics independantly.
That said, here’s some commentary about SBOTF that I have gleaned from the original tease, tracking the price action since July, reading member comments on this site, and studying anything and everything I can find about the Company and it’s product, Giant Keyhole Limpet Hemogobulin, a/k/a KLH.
First, a little peeve I’ve developed; the actual name of this animal that is the central focus of the business. I’ve noticed a trend of sorts by readers to refer to the Limpet as a ”snail”, ”escargot”, or something along those lines. While some may be using this as a light-hearted way of referring to the animal, it is not any of those. Please, use the proper name – as silly as it might sound. New readers could easily dismiss the entire idea and be misled otherwise. No disrespect meant to any who have done this, but I think it’s important we stay on track.
Now, some factoids for you.
If you haven’t done your due dilligence yet, the place to start is right here on this page. In the upper right you’ll see a box that says ”Teaser Tracking.” Click on that. The page that comes up is a list of the teases which Travis has posted over the past many months. Second from the top is the one re SBOTF. Some good tidbits of info right there. But what you want to do is look all the way over to the right and click on the link to the original tease posting. Open that and you’ll get the full story that Travis wrote when he first uncovered this tease (produced by Nick Hodge) and is a solid foundation of info about the company. Read it – two or three times to get an understanding of what SBOTF is all about.
Next, if you can find it, try and get a post that has the original video that Hodge did to tease the company with. In it, he (Hodge) interviews a couple of the company’s top executives and takes the cameras outside the room totalk with another employee about the ”farming” process that SBOTF has spent years and millions developing and patenting. You’ll get a pretty good visual inspection of the plant itself, the ”grow tanks”, and the Limpet. Good stuff. By the end you’ll have a fair overview of the company and what it does. FYI, the video tease runs about 40 minutes. It’s the first 25 minutes or so that will interest you. The remainder is what all teases consist of, overblown and repetitive pleas to get you to subscribe to the newsletter service that the promoter has to offer. Save yourself time and money by skipping that stuff.
A few takeaways from the video and additional research:
SBOTF has been around since the late 1990’s, working on how to extract the blood from the Limpet without killing them (they have done that and gotten patents on the process) and how to raise them in captivity in order to ensure a continuious supply of the animals to work with. This ”farming” process has, for the most part, been perfected and SBOTF can now raise them from fertilization of sperm and egg to maturity. They have a lifespan of some 30 years, and coupled with the patent-protected process they developed for extracting the blood without killing the Limpet, the company can now say with assurance that they can provide the Big Pharma with all the KLH they need to conduct clinical trials and produce the drugs they develop once FDA approval is granted. And – this is a big ”and” – they are the ONLY company in existence that can do this at the present time. The many patents they hold may ensure that to be the case for years to come.
Did I mention that KLH cannot be synthesized? So far nobody has been able to do that, so the supply of KLH from SBOTF seems to remain the only game in town.
Stellar Bio has yet to turn a profit. Sales and not much to write home about. That is mainly due to the small supply available and that SBOTF has focused on R&D in the past moreso than actual KLH production. That’s my best guess – I can’t verify that but seems to be the case. It is changing, however. The R&D is still in full swing, but the ability to produce and sell KLH is starting to ramp up as witnessed by increasing sales volume. It’ll take time but those increasing sales are coming.
In the wild (ocean floor), the Giant Keyhole Limpet has never been found ANYWHERE in the world other than in the small colony (estimated to be about 100,000 animals) which is just offshore from the Stellar Bio plant in Ventura County, CA. The enviromental community has been getting more and more concerned about the harvesting of the Limpets from this colony since there apparently aren’t any more around. Whisper talk about possible extinction have begun to surface, although no official governmental action regarding a ”protected specise” has yet been issued. This is why the farming of the animals has been crucial and why Stellar has such a leg up on any possible competition. If the Tree Huggers get hold of that idea, the ability to harvest the colony could – and probably would – be severely impacted.
Recent price and volume action has been fast and furious. As more and more people are becoming aware of the company by means of Hodges’ tease and thing such as this discussion, volume has had days that were near three times the average six months ago (175K shares average vs. some days now running around 500K). And most of this is upside volume indicating increasing demand for shares of a small float. This of course leads to highr prices as we are witnessing as I write.
For now, the gravy train is tearing down the track. The question is, when will demand for shares be curtailed as investor thirst for a bite of Limpet pie become satisfied? When will Nick Hodge back off this promotion, letting the press subside and therefore lessening investor awareness (the stock is not covered by any analyst, anywhere, that I can find, nor is it held by any mutual fund or investment management company). If and when this interest backs off, what effect will that have on the stock price? Trees don’t grow to the sky … or do they?
I can’t answer those questions. Just like you, I can only hold ’um and not fold ’um – yet. That day may come, and that is why I suggest anyone long the stock keep a DAILY eye on it. I’m making no prediction whatsoever about where the price will go over the next several weeks or months. In the interest of full disclosure, I have already taken some money off the table just to partially protect the quick profits I made since purchase. I sold about 30% of my initial position when that part became valued around 50% of my original investment. What remains is valued today right at the same $ amount I first put in. The amouunt I pulled out gives me full protection of some 50% of my original investment. Would I be better off today if I hadn’t done that? Yes. I would, because the price continues to rise. Will I be better of for having made thaat sale if the price stumbles and falls in the near future? Again, yes, I will – if the price falls. Some wise man once said ”you can’t go broke if you take profits” and I believe in that. Me, I don’t care for the idea of going broke, so I’m perfectly happy with this concept. No regrets about putting actual money in the bank, so to speak.
Comments? Concerns? Insights? Let the fun began!
Sincerely,
Your Resident Blind Squirrel
Jim Skelton

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234 Responses to Stellar Biotechnologies – The real deal or just more tulip bulbs?


  1. The new guru of biotech on GumShoe does not think SBOTF is a good investment as he is not a KLH fan and sees it mostly failing in trials as a catalyst. I held out for a while and argued all the “long” points but he continued to research and does not like the long term prospects for Stellar. He knows a lot more about microbiology and medicine than I do so I got out several months ago and invested in BNIKF as my main microcap.
    Here’s another tip–if you can get in DRTX tomorrow morn–do so. It should go way up with a positive AdCom for its antibiotic Dalvance. I see the odds of Dalvance getting a positive vote north of 90%.

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    • I’m still long SBOTF. It is already proven highly successful as a catalyst. Will one of the 20 trials it’s now involved with be successful. I dunno! But if it proves efficacious Dr. KSS believes someone will learn how to synthesize KLH. That might concern me if I was Stellar’s CEO, but not as an investor. No one will spend the time and money to try to develop it until KLH proves to have a large market. When KLH proves to have a big market, SBOTF will skyrocket. Also if KLH is used as a catalyst in a successful trial, is approved, then the company decides they don’t want to use KLH — maybe because of the price. They go to the FDA and say I want to use this cheaper catalyst — OK? Will the FDA say — sure no problem change it any way you like!. Not sure, but I don’t think so.
      Additionally California was concerned about biotechs ravaging their coastal aquaculture. That’s why Cal. and NIH gave grants to Stellar to develop a sustainable way to extract KLH. They have the facilities. They have patents. They appear to have a pretty good moat.
      Lastly even with the run up in Sept. there have been no insider sales. Always a good sign.

      Even though I work for a physician, I have limited scientific knowledge. And my investing record is spotty at best. This is a risky investment, and I’m probably totally wrong. But I’m sticking with it for a while.

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  2. Well, well, well, the last three days have seen a 41% jump, from $0.92 to $1.40, and on huge…35X average daily volume. I suspect this huge jump has something to do with Michael Robinson releasing a promotion to sell his Money Morning Prospectus, with a reference to “Living Metal”, which calls KLH something else and calls the Keyhole Limpet something else. Travis has that covered. here:

    http://www.stockgumshoe.com/reviews/radical-technology-profits/liquid-metal-tiny-company-has-monopoly-141478-for-a-thimbleful/

    But there is also other news: Stellar to be listed on the major exchanges, several Big Pharma companies lining up to ink a deal with Stellar. A lot of this may be hype, or it may be true; I’ve been hearing it for quite some time. But what is an absolute fact is that our volume was 1.75 million shares traded yesterday, 1.25 million shares traded today, and another 0.5 million shares sold Monday. Let’s see how it goes tomorrow. I’m astonished at this Lazarus-like performance.

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    • Dayo22: I would be rather cautious at this point in time. I got out of Stellar a few months ago, just before it went down so badly. IMHO this one might go up a little while longer( how long I don’t know) but then it is time to come back down again. It has been heavily promoted again and after such promotions it does quite well.
      If there is real value to Stellar only time will tell, but it would take a couple of years to really find out. If you have this kind of time frame and determination to stay with it, perhaps it could work for you. I did not have that kind of conviction into their product nor into the company.
      I would also recommend that you do read anything you get your hands on that deals with Stellar and KHL. Then decide for yourself! Good luck with your investments!

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    • Dayo22, we have been fighting through old resistance in the $1.50 area; it seemed that every time we approached $1.50, we would get hit with massive selling, due, I suppose to overhead supply. Now, it certainly appears that all the people who needed to sell have sold, and we’ve broken through that resistance and are in the process of making a run at the previous high, about $2.30. I keep thinking: Holy cow! It can’t keep this up, and every day it keeps it up. I’ve rarely seen this kind of huge buy pressure. Last Friday, we hit $1.82, then Fed Yellen spoke, and we fell back to close at $1.72. Now, today, again, we have jumped back and handily taken out that $1.82 figure, with some force, and HUGE volume. Before this rally started, we were trading 35,000 shares a day; immediately we jumped to 1.5 million shares per day. That kind of volume screams: Institutions, or insiders. I don’t know exactly why this is happening, but we are clearly trending, and the trend, as you might have heard, is your friend. I wouldn’t sell, if you pointed a gun at me.

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  3. Brad, Fred, Herbalix et al:
    Brad & Fred, glad to see you both had the fortitude to stick with this situation and are now reaping the gain – once again.
    And Herbalix, you acted in mostly the same way I did. Except I sold in April(?) around $0.93, bought back in on July 28th for $1.11, then sold August 18 for $1.57. I am currently out. I thought the effect of the newsletter promos had run their course. Not! It closed at $1.94 today!
    I urge caution at tis point. Will it run to the old highs around $2.30 (or more?) before reality sets in and the retreat starts? Lordy, that’s one question I wish I had an answer to. That said, anyone who has been on the sidelines watching and is now feeling that old familiar feeling of having missed out, wanting so badly to get in and get some of this before it’s all gone, I suggest that if you do so be ready to act fast when it turns. Because it WILL turn at some point just as in the past. My opinion only, of course. There have been no announced corporate developments of a fundamental nature to support this run up. The Q3 report showed good progress, yes – but nothing so good as to warrant this sort of move. This is being fueled, I believe, mainly by the promotions underway, and this time there are at least three publisher/writers that have focused on SBOTF at the same time, not just one. Their readers are piling on, driving the price up.
    Anyway, a note if you have missed this:
    When Travis unteased the promo from Michael Robinson about “Living Metal” and showed it to be none other than reference to Stellar Biotech, I wrote a commentary that was posted under that thread. Since then I have posted three or four other thoughts on SBOTF and this recent turn of events there. It wasn’t until yesterday I realized I had made something of a dual blog here, posting on two sites info that could be on either one. So, if you are interested, go to the SG homepage, click on the comments section, and open the thread about Stellar under the ” Living Metal: $147,000 for a Thimblefull (or something to that effect)” to see commentary from what is mostly an entire new group of “Stellar” Gummies and their thoughts. Many are new to the Stellar story and could benefit from the past experiences of those such as you. I will be posting future musings on SBOTF on that site. Sorry for the confusion here. But if you are to see everything that is being passed around on the site you have to look at both threads.
    I’m having such a deja vu moment. It was July 2013 when Stellar was brought to our attention by Nick Hodge and the price was ~$0.63. Rose to ~$2,30 in August then began the gyrations all the way back to $0.60 this July (2014). And now, late August, looks to be headed back to that $2.00+ mark once again. What a ride this company has taken us on.
    Se ya on the other thread, gentlemen. And ladies – where are you?
    Jim Skelton
    The Blind Squirrel

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    • Hi Jim;
      I’m pretty sure this volume is the partly result of Michael Robinson’s Living Metal promo, and I’ve suspected for some time that some big owner, perhaps that Ernesto fellow, and his private placement shares and warrants, but Stellar is trading HUGE volume…far too much for this to be simply a couple insiders manipulating the stock. the last couple weeks have seen like 2 million shares–35X average volume, when compared to that of the week preceding this run, when we were trading 35,000 shares per day. I’m really wondering if Stellar has news that they haven’t released; there are dozens of trials going on; all you’d need is for one to show good results, and away we go. Then, there are the rumors of an uplisting; there are a lot of logs on the fire. I’ve always thought that it was only a matter of time before this baby flies.

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  4. Hello would you hold klh until is hit the USexchange as it is thought to easily jump to 3 or any other thoughts please

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    • First. We’ve had some discussions on SG about following other’s advice. If its your money — its your call. Me. I’m sure this surge in price is the result of advertising from Money Map Press et al. Without the pumping or some other catalyst I don’t think the stock can hold $2.30. Of course if the stock is uplisted to the Nasdaq, that might provide a boost. They’ve been talking about that for quite a while.

      I like this company. Long term it MIGHT do well. It has a lot of irons in the fire and if it hits on just one — the price could soar. But short term IMHO I think it will peak and then begin a slow decline till some event in the future will decide its fate. So when the price levels and volume decreases I think I might sell at least half my holdings — or more, Then I cam think about buying back in at a lower price. Good Luck!

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