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The Israeli company, which is engaged in the research, development and production of medical equipment in the field of intracorporeal nutrition, reports on many transactions with hospitals in the United States that jump the value of its stock, as evidenced by the jump of about 53% on last July 20. It’s important, it’s definitely an event with value for the company’s business, but investors should remember – these companies’ way to profits goes through their pockets. These companies are thin on cash and they are losing and burning cash. Their way to success is IPOs, and indeed after a series of public announcements, the IPO arrived and the stock made its way down. So good news is fine, just remember that there are many times IPOs also bring the price back down.
To the stock page >>> Enuizen
One way or another, the company has developed electromagnetic navigation systems that assist medical teams in inserting a feeding tube in an efficient and safe manner that prevents risks and medical complications. On the same day it jumped (20.7), the company issued another generic announcement about another deal in which it will sell its ENvue system to an American hospital that belongs to the largest hospital chain in Texas.
According to the same announcement, BaylorScott & White Centennial Hospital, which belongs to a healthcare network that includes 52 hospitals across the US, will purchase the ENvue system and consumables (probes) annually. So why did the stock jump so much? There was nothing to justify such a jump, but what does appear is that the FDA ordered a recall to a competing company and thus Anuigen remained the only one in the arena.
Apparently, everything looks rosy at Enuizen – the company reports on deals with the potential to grow even more, registered a patent for its product, plans to list on Wall Street and won a monopoly with the recall of its competitors. Still, the company records quite a few losses and the stock is falling.
Enuizen’s stock fell by 60% from its peak a year ago and by 40% since the beginning of the year to a price of NIS 23.5, which represents a value of NIS 61 million. In 2021, the company lost NIS 7 million on revenues of NIS 538,000. This week Enuizen issued shares for NIS 3.3 million. In December, the company raised NIS 12 million through four investors at a price of NIS 36 per share, which reflected a 15% discount.
As mentioned, Enuizen raised 3.3 million shekels this week, but this is a failure since the company offered 7,200 securities worth 18 million shekels – an actual raising of 18% of what it planned. As of the end of 2021 Envision has cash in the amount of less than 2.5 million dollars (about 8.5 million shekels) so that the 3.3 million shekels she raised now is very essential for the company. However, the company burns about NIS 17-19 million per year according to the rate of last year and the meaning is that it has no money to continue operations for an extended period. She lives hand to mouth and is desperate for cash. This is exactly the problem, every positive message is pushed to be even more positive, the goal is clear – to boost the stock and raise money – caution. In most of these cases the stock goes back down.
In an interview with Bizportal last December, CEO Dr. Doron Besser explained that “it is accepted in the market to give a certain discount, in the long term this discount is not really significant, because the funds from the recruitment will help the company to develop significantly, we will use the funds to expand to a large number of hospitals in other countries in the US, and we will continue to increase sales.”
CEO Baser Tzedek, the company did develop, but over time, as mentioned, the investors became less enthusiastic and the stock cooled down significantly. But I do hope that the stock will bring value to investors in the future” – this is precisely where Besser was wrong. Envision’s investors are disappointed. They expected better performance from the company in light of the recruitments it made and those it still wants to make. When they did not receive the goods, they took revenge and cut the market value of The company is in a severe slump. So it is true that the whole market has experienced a shake-up in the last six months with the decline in value, but it seems that Envision’s stock has experienced it a little harder. However, it is quite likely that the company will enjoy its exclusivity in the field and reduce the loss at a high rate More that will bring handsome profits in the foreseeable future.
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