Borislav Tonev

GeoVax Labs, Inc. (OTCMKTS:GOVX) Proves Hesitant Under Pressure

by Borislav Tonev October 6, 2014

GeoVax Labs, Inc. (OTCMKTS:GOVX, GOVX message board) started off a while ago and they set themselves quite a challenge - developing a vaccine for HIV. Many companies, both big and small, have tried their hands at presenting the world with a way to prevent one of the planet's most horrible diseases from spreading, but, as you probably know, not a single one has succeeded so far.

GOVX has been issuing press releases every now and then telling us that they're getting closer to achieving their goal, but somehow, they've been having difficulties grabbing investors' imagination and up until last week, nobody was really interested in the company. A press release from October 2, however, was enough to change all that.

Instead of pressing on and focusing on the AIDS vaccine, they announced that they are undertaking one more daunting task – developing a vaccine for Ebola. The deadly virus has been grabbing headlines since the first case of the horrible disease was confirmed in the US and, not surprisingly, GOVX's press release meant that lots of eyes were pointing to the company. Even FOX Business were intrigued when they heard the news and they organized an interview with David Dodd, GOVX's Chairman of the Board, in which he talked a little bit about his company's new endeavor.

It's not every day that we see a big media outlet getting interested in a small $0.20 per share OTC company and, not surprisingly, investors were all over GOVX on Thursday. In a matter of just six and a half hours, they managed to trade more than 1.2 million shares while pushing the price up by an incredible 70%. Unfortunately, Friday's session proved to be completely different. The volumes were quite a bit smaller and instead of gaining yet more ground and threatening the $0.40 per share mark, GOVX slipped and lost more than a tenth of its market cap, finishing the week at $0.319.

So, did the momentum run out? Or was this simply a consolidation which will precede a more solid climb in the right direction?

Well, Mr. Dodd told FOX that the company is actually developing not one, but two vaccines which will supposedly fight Ebola one day. Unfortunately, you won't be able to find them in your local pharmacy any time soon. The first one should be out within the next eighteen months and if everything goes according to plan, the second one will be available to the general public within the next four to five years.

This goes to show that investors might have jumped the gun a little bit with all the hype on Thursday and the slide that ensued afterwards means that the mistake could prove costly for some.

On the bright side, GOVX's financial situation isn't too bad and the company has managed to protect its shareholders from significant dilution. That, however, doesn't appear to be enough to offset the effects of the excessive hype which means that about thirty-five minutes after today's opening bell, the ticker is another 2.8% in the red.

If you feel confident about GOVX's ability to eventually come up with vaccines for some of the world's most terrible viruses, you should bear in mind that the company isn't really a short term investment. Patience and careful evaluation of all the risks is mandatory.

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