# Sona Nanotech



## MrBlackhill (Jun 10, 2020)

I guess that's more about gambling and winning the lottery or is there any method for that kind of bet? I know that stocks in pharmaceutics and medical instruments can skyrocket anytime during these times of COVID, but still.... I mean, it happened to me to buy a stock which did x3 the next week (but I wanted to hold it for long so I didn't sell it and it went down a bit, but it's ok), but that was all luck. I had the feeling it would go skyrocket, but my luck was the perfect timing.

Now, that one (SONA.CN) just went from about 0.30 in February to 8.65 recently, which is almost x30 and can be a millionaire-maker. (I used 0.30 as the base price since there was no volume prior to February and no indications which could make someone put that stock on their radar)

All that due to the announcement of a COVID antigen test.

What's your impressions on this?


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## doctrine (Sep 30, 2011)

I have some friends who made a lot of money in this company. They have a test that probably works better than most but still requires a little more testing/trials before it can be sold even under emergency use provisions, and they need substantial capital to actually manufacture and sell. This company will tank hard (>90%) when a vaccine comes out - and there are multiple Phase 3 trials underway, and the markets tend to price these things in early. I would be shocked if anyone is going to spend close to what, a billion dollars, to buy out a company with close to zero in actual assets (negative book value). After they get their final trial results in a month, they will still have to manufacture, price, market, distribute, and sell potentially tens of millions of tests in the next 6-9 months, all while hoping the market doesn't disappear while this happens. And they have zero capital and experience to actually implement such a plan, and there is competition! New tests are under development, many nearly as effective and fast, and they have to price aggressively against cheaper but proven testing! To get to market, they will have to partner extensively, which means even lower margins and sales which will have to be even higher. So much risk in execution! This company has never done it before!

If I owned this, I would sell at least half or more of my stake, even if I believed somehow this company is going to have enough sales to justify $500M valuation or be bought for $500M-$1B. Companies with that kind of capital in this space are not investing it in testing, no matter how great it is. They are spending on the vaccine. This company is going to tank on the first Phase 3 results. The trials are underway in multiple countries with multiple candidates.


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## MrBlackhill (Jun 10, 2020)

Thanks for the analysis!

The stock is already down 17% from its peek. I guess that was to be expected as many people are selling to secure that easy quick profit.

Another case : PBT-U.CN


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## doctrine (Sep 30, 2011)

And so the 'get rich quick' stock story ends here - SONA down from a high of $15.20 to now $1 or less as they had insufficient data to achieve either FDA or Health Canada interim authorization. There are literally hundreds of companies making these tests and Canada has already purchased tens of millions from other manufacturers. There is no book value to fall back on so this is likely the end. 









Sona Nanotech Withdraws Rapid COVID-19 Antigen Test Application Based on Feedback from Health Canada


Sona Nanotech Withdraws Rapid COVID-19 Antigen Test Application Based on Feedback from Health Canada




stockhouse.com





This should be a very cautionary tale especially in an era of hype stocks. Real value matters, and so does common sense. Lots of people holding the bag here on useless paper hyped by a lot of press releases and no sales. Imagine this company was worth almost $1 billion dollars.


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## MrBlackhill (Jun 10, 2020)

doctrine said:


> And so the 'get rich quick' stock story ends here - SONA down from a high of $15.20 to now $1 or less as they had insufficient data to achieve either FDA or Health Canada interim authorization. There are literally hundreds of companies making these tests and Canada has already purchased tens of millions from other manufacturers. There is no book value to fall back on so this is likely the end.
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> ...


Thanks for the follow-up on this one! I was watching it because I wanted to see when it would crash and how bad it would crash.


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