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

By theblindsquirrel, August 21, 2013

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

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

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David Brown
Guest

Jim–from Wikipedia: Fissurellidae, common name the keyhole limpets and slit limpets, is a taxonomic family of limpet-like sea snails, marine gastropod molluscs in the clade Vetigastropoda.[1][2]. Apparently keyhole limpets aren’t true limpits but are indeed “limpet-like sea snails.” Go escargot go! Of course, no matter what type of mollusk we have, the most important factors for an investor are the value of the material harvested to the biomedical community, the patents the company develops regarding their processes, the scarcity of the keyhole limpet and its sustainability. Like you, I’ve done a lot of reading–mainly focused on the factors I just… Read more »

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dallen
Member
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dallen

I have not lost any sleep over my keyhole pet investment, and do not feel compelled to sit by the computer all day. Last week when some of my other positions were down a little, Stellar was showing a profit, remember I bought @ .63 and as of today I am up 128.80, I have not taken any profit and still plan on holding. I spent hours researching the company , and the science behind KLH and bought prior to the name change. I get direct updates from Stellar, as I signed up for them. I NEVER invest money I… Read more »

rfrose
Member
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I’m long on this one. My wife is a Biochem PHD student at UMC MS working on drug transport systems. It sounds like this company may be right up her alley of study and interest. I hope she will have that interview with these folks. I’ve done my reading on SBOTF like the rest of you and like what I see. The halt is disconcerting, especially if a buyout is pending, hopefully not. Along with the rest of you I’ve got one eye stuck to news feed and ticker and the other doing my regular work. Other: LQMT, PLUG, OESX,… Read more »

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Jana B
Guest

First, I’m not sure if a reply to a month old post will show up or not. Second , woo hoo we’re at $2!! And it hit this level BEFORE the Fed. announced its news. Third , this may be breaking protocol (and if so I’m sure I’ll hear about it)
Roger, can you direct me to a discussion page on PLUG? My curiosity has been piqued. Also, hope you don’t think I’m full of myself- really would like to make an investor visit at some point.

Roger Rose
Guest
Roger Rose

I would not think that your ‘ping’ to me is off protocol as long as the discussion of other stock does not overtake this thread. I would hope that the folks here do mention other stocks that they find ‘viable’. Find PLUG POWER on Seeking Alpha. No, not full of yourself – just excited like the rest of us. If interest is shown for several to visit all the better (and more likely that we will get the tour rather than just one person). I will wait for all to go at once if the interest is shown. I think… Read more »

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Jana B
Guest

Well, keep a defibrillator on hand just in case!!

rfrose
Member
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Here is what I got back from Stellar on my email inquiry. Not much but at least something. “Dear Mr. Rose Thank you for your email and your interest in Stellar Biotechnologies. Stellar has placed a halt on trading of our stock (TSX:KLH, OTCQB: SBOTF) pending a news release. We will release the news as soon as possible however the timing of the news release is not yet known. Trading of the stock will resume again after the news has been released. Thank you again….”. Jim, nice recount on how you invest. I rode the wave during 2000 on day… Read more »

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David Brown
Guest

Logically, a partnership or a buyout is in the works–Stellar just announced all the latest research news in the past several weeks. What else could it be?

rfrose
Member
👍0

I hope partnership and with an established pharmaceutical or integrator. See the Presidents letter on Stellar’s web site.

David Brown
Guest

Whatever the news it is very likely to be very good for the stockholders in the short term. Since the stock had come down a bit in the afternoon on 8/20, I added 25% to my holdings just 3 mts. before the market closed on Tuesday. That may have been my best gut instinct move ever!

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michael
Guest

So I’m not alone? I added more right before too! We shall all meet for dinner hha

David Brown
Guest

We just got barbecued. It’s hard to believe that a company can legally manipulate it’s stock price to raise money when the market had priced it at 1.49 and rising. I’m furious. Given the details of the announcement, I don’t see this stock going much above 1.10 for the next three years–perhaps I am missing something. Help me out here.

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michael
Guest

added 1000 @ 1.13 limit filled at 1.12xx averaged down some. here we goo

michael
Guest

I mean if you were buying the other day at 1.20-1.50

why wouldn’t you buy when on sale at 1.15+/-?

wish I hit that .999 this morning, lucky bastard! probably was you Jim!

David Brown
Guest

Maybe I’m over reacting but it looks to me that the company’s private offering just about guarantees that the stock wont go much above 1.35 for the next couple years unless they get some incredible good news and/or earnings surprises. The presiden’ts optimistic letter in early August certainly gave no indication of a cash shortfall (and the stock soared after that). I feel duped right now. Hopefully, I am wrong and the coming days look much brighter for this stock (and my portfolio).

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J. R. MCLEOD
Guest
J. R. MCLEOD

Bought at .55/ share, watched it go to 1.49. Now it’s about 1.15. I think were still on the gravy train. Folks didn’t put up $12,000,000. for window dressing. I see a Buy out at about $3-$4.00

David Brown
Guest

I sure hope that you are right J. R. I’d love to have egg on my face after making money rather than losing it : )

rfrose
Member
👍0

Thanks Jim for the education.
I don’t begrudge being paid for hard work, I just thought that it could save money, pay yourself instead of them, as it were.
David, hear ya are:

ac·cred·it·ed in·ves·tor

1.investor meeting certain standards: a person or organization judged suitable to undertake an investment, based on criteria such as experience, net worth, and income levels

What hurts is that had this same thing happen a bit ago with Liquid Metal (LQMT). I’m down (a bit) but not out – long term folks, this ain’t day trading.
Keep smiling and hope for the 3-4 bucks.

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rfrose
Member
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And….
The three hour break we had was oh so wonderful. I haven’t heard anywhere if this was due to a hack. And wow if it was!

David Brown
Guest

Perhaps Stellar suspended the NASDAQ pending an announcements LOL

David Brown
Guest

Jim: Of course Stellar is playing by the rigged rules of the rich, if they are indeed playing by the rules. They have plenty of fancy lawyers to cover their tracks so that they can get away with this baloney–like suspending trading for a full day, sheesh. So if I’m being protected now from myself so I can’t buy shares at $1.05 how come I could buy as many as I wanted to at $1.49 on Tuesday or as many as I want tomorrow for $1.14–there is no logic to that argument. It’s a rigged game. I must say that… Read more »

R. T. Barzallo
Guest
R. T. Barzallo

I invested in SBOTF for the long term. I was drawn by Nick Hodge with his very informative report about this rare sea snail off the coast of Ventura California. I did my research, same steps that Mr. Skelton covered. I bought this rather late at .77cents and I expect to buy some more when the stock dips and panic sets in below .77cents. With that said, the stock is very risky and in the early stages prone to short sellers. The company is going to need more cash for R & D and for expanding into additional farms to… Read more »

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jamespaul108
Irregular
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jamespaul108

R.T., I’m interested in SBOTF, but there are some incons