Why Organovo Holdings Inc. Shares Tumbled

Organovo shares sour after the company reports its full-year earnings results. Find out what investors should really have their eyes on.

Jun 12, 2014 at 2:14PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Organovo Holdings (NYSEMKT:ONVO), a clinical-stage biologics company focused on engineering human tissues that can be used in the drug discovery process or as therapeutic implants, dipped as much as 14% after reporting its full-year results before the opening bell.

So what: According to Organovo's press release, revenue (as much as it has any, given that it's wholly clinical) dipped 67% to $0.4 million from $1.2 million in the prior-year period as operating expenses doubled to $21 million from $10.5 million. Specifically, research and development expenses soared 135% to $8 million, while selling, general and administrative expenses spiked 83% to $13 million. The company announced that it ended the year with $47.3 million in working capital, though the company raised $43.4 million in net proceeds from offering 10.35 million shares during the course of the year.

Now what: While investors are clearly excited about the coming debut of Organovo's first product, a 3-D liver assay test, today's earnings report is a stark reminder that clinical-stage companies burn through cash at an exceptional rate, and if Organovo isn't able to successfully translate its ideas on paper into tangible revenue quickly then it could be forced to seek additional financing. Chances are if you've already come this far with Organovo you're not going to be deterred by its full-year report and are invested for the long haul based on its unique technology. As for me, with an accumulated deficit now topping $92 million I'd much rather stick to the sidelines and let its initial product do all the talking.

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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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