California Dreaming

California Dreaming

Before we get into our analysis of Tandem’s (NASDAQ: TNDM) results let’s get the important numbers out of the way first, per the release;

“As of September 30, 2017, the Company had $22.5 million in cash, cash equivalents, short-term investments and restricted cash. The Company’s net use of cash in the third quarter of 2017 was $19.2 million compared to $20.2 million in the same period of 2016.

The Company’s cash balance as of September 30, 2017 includes $4.1 million in net proceeds under the previously announced “at the market” public offering of common stock. Not reflected in the Company’s cash balance as of September 30, 2017 is approximately $14.8 million in net proceeds from a public equity offering completed in October 2017.”

Keeping things simple that means as we reported yesterday the company’s current cash position is approximately $30 million – $22.5 plus $14.8 million less $5 million monthly burn.

As the company noted in their prepared remarks they will once again need to raise more capital by mid-2018. The question we have is just how far do they plan on diluting this sucker?

Basically, we see the company suffering from some very serious delusions. Yes, the B warrants sold with the last dilution have a six-month shelf-life and if exercised would generate another $16 million in cash, but they also carry a strike price of $3.50 per share when shares today closed at $2.72.

Yet the real delusion is there is no sense of urgency, no serious cost cutting no sense that something needs to be done and done like yesterday. But of course, the management team is happy as the company paid out $1.5 million in retention bonuses during the quarter.

It sure would be nice if the company did something besides blame their lousy results on Medtronic (NYSE: MDT) and the weather. It sure would be nice if they ditched all this happy talk and started acknowledging what is becoming clearer by the day, THEY ARE RUNNING OIT OF MONEY AND THEY CANNOT DILUTE THIS SUCKER CONTINUOSLY. Listen we know investors can be stupid but there comes a point when even stupid investors cry uncle and say no more.

Now we do have a plausible explanation for this happy talk as pot is now legal in the great state of California. Yep anyone can walk into a dispensary plunk down some cash and get stoned. Doing a quick Google search there are several of these dispensaries in the San Diego area so it’s possible the good folk at Tandem have some fun meetings. Given that there are also several In and Out burger outlets in the area they also have a great place to go after they get the munchies, which we hear is a side effect of “medical” pot.

Yep we can just imagine what these meetings must be like. Hey guys I know it looks like we’re running out money, but we have two things going for us. First as long as we have cash on hand no need to worry we’ll find a way to create more million-dollar bonuses. Second there are plenty of very stupid investors out there, so we should be able to bilk a few more million from these idiots before the well finally runs dry. Ok now that’s over did anyone bring rolling papers or should we just these old Exubera bongs?