Delcath Systems, Inc. (OTCMKTS:DCTHD) Just Ran 90% On A Short Squeeze We Predicted

A few days ago, we published this piece on Delcath Systems, Inc. (OTCMKTS:DCTHD). This is a company that many reading will almost certainly already be familiar with – it's been a real rollercoaster penny play throughout 2017 and has been a favorite of day traders year to date. A couple of major spikes has drawn volume, both long and short, on more than one occasion, and – for many – it's been a fun ride.In our latest coverage, the one linked to above, we put forward what we thought was a nice short-term trade on the stock.Our suggestion was to pick up an exposure as the company continued to decline into the start of this week in anticipation of a short squeeze. We noted that any such squeeze would need a catalyst and that we were looking at the release of the company's third-quarter financials (which were set to hit press any day) as potentially providing the catalyst in question.Sometimes we get it bang on and this is one of those times.The company bottomed out just ahead of $1 a share on Tuesday before management put out third quarter results at the start of play on Wednesday. During the session subsequent to the release, Delcath ran more than 90%. DCTHD Daily ChartThe numbers and the accompanying update were reasonable (we'll get to them shortly) but we're willing to bet that a large portion of the 90% upside appreciation was rooted in the large short crowd rushing to cover against a wave of speculative buy interest.So the question now becomes, what's next?In order to answer that, we're going to take a quick look at the numbers.For the third quarter of the year this year, Delcath reported revenues of a little over $0.7 million, up from the $0.4 million recorded during the same quarter last year. That's a modest increase of around 25% (if we were looking at multi-millions of dollars in revenues, 25% would be substantial, but we're not) but the scale of the interest is less important than what it implies about operations; this is the first time the company has recorded a revenue boost year over year in a while and it shows that – whatever is happening from a capital structure and management perspective – demand for Delcath's lead portfolio asset is real and rising. Small, in the grand scheme of things, sure, but rising nonetheless.Couple this with the fact that first nine months of 2017 increased 53% to $2.0 million from $1.3 million in the prior-year period and the acceleration is something that the more bullish operators out there might be inclined to get a bit excited about.What's of more interest to us, however, is the company's comments on its lead development program. We noted in our coverage last week that any positive update on this program could seriously shift sentiment and we got what we were looking for. To add a bit of background, this program, a phase 3 clinical trial investigating Melphalan/HDS in hepatic dominant ocular melanoma, has basically been plodding along for the past twelve months as a sort of ongoing afterthought, with the capital constraints and a reverse split risk-taking center stage across the period.With the reverse split in the rearview, however, and the capital constraints (somewhat) lifted, focus can now shift to the phase 3 program.Management said it expects to ramp up enrollment over the coming months and – even more interesting – expects to put out an interim safety update before the end of this year. If we see a clean bill of health on the safety side of things, the stock is likely going to spike. F we get any indication of efficacy at the same time, it's going to run.This one still isn’t a solid long-term investment – don’t get us wrong. There's far too much uncertainty to pitch it as that right now. With that said, however, and in anticipation of some interim data before the year draws to a close, it might be a smart speculative punt at current prices.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on DCTHD, sign up below!Image courtesy of EvinDC via FlickrDisclosure: We have no position in DCTHD and have not been compensated for this article.