Investors Plug Into Cyber-Care Dave Marino-Nachison (TMF Braden)
December 20, 1999
Probably one of the best ways to turn off the Fool's news team is to send out a gimmicky press release, which is likely why we passed on a late August missive from medical services company Medical Industries of America (MIOA). The kiss of death? Exclamation points.
MIOA was trying to drum up enthusiasm for its rebirth as Cyber-Care (Nasdaq: CYBR), which offers a suite of services -- including in-house clinical services, assisted-living facility pharmacy services, and chartered medical airlift services -- targeted at high-cost, high-risk patients, all wrapped up in a broader Internet strategy. At its fulcrum was CyberCare Technologies, which developed what would become the company's flagship Electronic House Call (EHC) system.
Unfortunately, MIOA felt the need to spice up its corporate release with boosterish phrasing claiming "This is the right business!" and "It all fits!" Great! But come on, kiddies, tone down the punctuation. As things turned out, investors were waiting for more than exclamations as well -- but when the news releases began obliging, the shares jumped quickly out of penny-stock land.
Cyber-Care stock rose approximately 20% to an all-time high of as much as $11 1/2 per share today on the news that a Florida developer will make the EHC system available in the 450 homes it's building near Jacksonville. It's meant a lot of money for a few people in a little time, the shares trading in the $2 range just a month ago.
Today's news is just one of several recent announcements signaling the early adoption of EHC, an interesting technology developed at Georgia Tech that, if effective, would seem to have considerable appeal to healthcare organizations of varied stripe.
The concept is certainly easy enough to grasp: Imagine a small television with a touchscreen interface that a patient could keep by his or her bedside. It monitors vital signs, schedules medications, and provides a 24-hour visual interface with a doctor or nurse, allowing for instant real-time communications between caregiver and patient even outside hospital grounds. (For a more detailed description, click here.)
The company has nine months of operations on the books in 1999, but EHC as a new development has brought nothing but losses -- though Chairman and CEO Michael Morrell has said he sees the unit delivering profits next year.
Speculation by investors who believe they've grabbed a piece of a future blockbuster medical device is clearly behind the shares' recent rise, and investors should keep that in mind when researching Cyber-Care.