OptiBiotix - A trillion pound market opportunity!!!!!

I've written two blogs today. I'll let you make the connections and fill in the blanks between them both.

OptiBiotix listed on Aim in 2014 at a share price of 8p and has spectacularly risen to today's 70p and a heady £55m market cap. Wow!!! A multi-bagger in no time at all.

So what transformational deals have produced this stellar re-evaluation since the initial listing? Ummm...........now that's a tough one.

Certainly OptiBiotix has been given heavy exposure and promotion by individuals with vested interests, but let's look at the facts.

Interim results were released today.

Revenue £88,000.
Loss £615,000
NTAV £4m
Cash £3.6m
Operating cash outflow £900,000

Oh dear! Cash outflow is going to be about £2m this year, and this will clearly ramp up, as costs for R&D etc accelerate. A cash call will surely follow in 12/18 months time, since revenues will be wholly inadequate for the foreseeable future in my opinion.

The market cap. clearly can't be justified on fundamentals. On fundamentals,  a share price of 8p is about right.

Ok, I've been terribly negative here. What does the company actually do? Well, in short it does the following:-

"OptiBiotix has established a pipeline of microbiome modulators that can impact on lipid and cholesterol management, energy harvest and appetite suppression."

Now I've no idea if this is an area that will eventually be successful or not, and for that reason alone I wouldn't be tempted to pay the huge premium on the shares at the moment. Secondly, if this is indeed a massive growth area then the competition will be very fierce.

I've already stated many reasons to be cautious here on my Advfn thread:-

http://uk.advfn.com/cmn/fbb/thread.php3?id=35291865

If you look at the CEO speaking today and on other occasions, each time he is asked about progress he refers to the IP and the share price. Not once does he ever refer to the timings for significant revenue generation or profits. I'd suggest these are years away yet.

Other warning signs for me are that the Chairman has just stepped down, a plan to break the company into 4 separate divisions has been shelved (less than two months after declaring that this was their intention), and ludicrous statements about trillion dollar markets when they've recorded just £88,000 in revenues.

Finally, would I be interested in consuming a product that claimed to suppress my appetite? The answer is a categorical no. Firstly, the market for dietary products is overcrowded and unnecessary. Eat healthily and encourage healthy eating habits. Anybody who has ever used these products will tell you that as soon as they stop using them then they return to their bad eating habits and put any weight they lost back on again in no time at all. In short, they just don't work. Personally, I'd be very wary of consuming something claiming to suppress my appetite.

Anyway, if you are a shareholder then good luck, perhaps I've got it wrong and a huge deal will appear out of the blue.

For the time being, shareholders may need to rely on share promoters to try and keep the share price propped up. A sceptic might suggest that some of these enthusiasts had been given "free shares". I couldn't possibly comment.