Microbot Medical Inc (NASDAQ:MBOT) really squeezed the shorts this week. It’s been a while since we’ve seen such a short squeeze. The last notable one was in Tilray Inc (NASDAQ:TLRY).
MBOT appears to have caught a lot of short sellers off guard. We are hearing many stories of accounts blown-up after MBOT ran from $4 to almost $20 in just 2 days, before settling at $9.
We are going to take a look at what happened and the fundamentals behind MBOT. We are also going to be on the lookout for our subscribers on the next MBOT. Seeing MBOT explode up the charts gives us confidence that there are more stocks out there just waiting to squeeze the shorts like MBOT.
First up, a little background on MBOT for those that aren’t familiar with the company. Microbot Medical was founded in 2010 and commenced operations in 2011, becoming a NASDAQ listed company on November 28, 2016. The Company specializes in transformational micro-robotic medical technologies leveraging the natural and artificial lumens within the human body. Microbot’s current technological platforms, ViRobTM, TipCATTM, and CardioSertTM, are comprised of three highly advanced technologies, from which the Company is currently developing its first product candidate: the Self Cleaning Shunt, or SCSTM, for the treatment of hydrocephalus and Normal Pressure Hydrocephalus, or NPH; and focusing on the development of a Multi-Generation Pipeline Portfolio (MGPP) utilizing all technologies.
The news that sparked the short squeeze was MBOT receiving a patent in Europe. The company received a notification from the European Patent Office that it will grant a patent for Application No. 08738207, which covers the Company’s ViRob™ technology platform. Including this latest notification, the Company has 30 issued/allowed patents and 18 patent applications pending worldwide. CEO, President, and Chairman Harel Gadot said:
“The allowance of this European patent application further strengthens our global intellectual property estate covering micro-robotic technology platform. As we have demonstrated since becoming a publicly traded company, we are creating significant barriers to entry and this combined with the positive safety data we continue to achieve with our Self-Cleaning Shunt (SCS™), are reinforcing our pillars for success.”
The allowed application covers an autonomous vibration-driven device for movement relative to a juxtaposed surface, such as an inner wall of a lumen. The device includes a body and an array of fibers attached thereto, with at least some of the fibers maintaining contact with the juxtaposed surface and having anisotropic surface friction therewith, such that mutual vibratory motion between the device and the juxtaposed surface causes the device to move along the surface.
As usual and like any greedy microcap, MBOT did a direct offering on the price spike. MBOT entered into definitive agreements with several institutional investors for the purchase of 590,000 shares of its common stock, at a purchase price per share of $10.00, in a registered direct offering priced at-the-market. The closing of the offering is today, January 17th.
Lack of borrows
One of the main reasons for the short squeeze was the lack of borrows and inability by short sellers to locate stock to short sale. This effect magnified the move higher as it lessened the selling pressure. The shorts that were short were forced to buy in at higher prices as momentum day traders bid up the shares.
Currently trading with a market cap of just $26 million, MBOT is the type of low float runner that we look for here at Insider Financial. So far, 2019 is starting out great. Congrats to all that got in on MBOT.
For our next microcap runner like MBOT, sign up below!
Disclosure: We have no position in MBOT and have not been compensated for this article.
Image courtesy of Pexels