Borislav Tonev

Geovax Labs Inc (OTCMKTS:GOVX) Gives its Volatility a Boost

by Borislav Tonev February 4, 2016

Geovax Labs Inc (OTCMKTS:GOVX, GOVX message board) was born a while ago when the people behind it came up with the idea of creating a special type of vaccine platform that is supposed to stop the spread of the HIV virus. Some people reckon that they can do it. The Government, for example, has even agreed to give the small OTC company a helping hand with some grants.

Unfortunately, nearly fifteen years after GOVX opened its doors, product revenues are still nowhere in sight. As a result, many investors have simply gone bored. Over the last few months, the ticker has been especially illiquid and, as you can see from the chart, its performance has been rather disappointing.

The latest 10-Q is not much to look at, either:

  • cash: $1.8 million
  • current assets: $1.9 million
  • current liabilities: $118 thousand
  • grant revenue for Q3: $93 thousand
  • Q3 net loss: $620 thousand

The government grants received during the reported quarter are a whopping 71% below the ones utilized during the same period of 2014, and according to the report, on September 30, GOVX was left with just over $260 thousand in unused grant funds.

Yesterday, however, investors forgot about all these problems. GOVX proudly announced that it will try to come up with a vaccine for the horrible Zika virus that's been all over the news lately. Subsequently, the University of Georgia said that it too will help, and the market went absolutely crazy.

GOVX opened the session with a huge gap up and it reached an intraday high of a whopping $0.14 (78% above its previous close). Sadly, it failed to stay there for long and after a horrifyingly steep drop, it stopped at $0.09 – a gain of just 12%.

The performance was hardly dazzling and the volatile intraday swings actually gave investors only a tiny chance for a potential profit, but the dollar volume of almost $390 thousand clearly shows that people are interested. How long will that last, though?

The Zika virus is a serious threat and the company that can come up with a way to contain it is sure to gain a lot of exposure, and possibly, a lot of money. Needless to say, however, if GOVX takes another fifteen years to complete the development of the new vaccine, it will have a really hard time keeping investors interested, and the stock might just plummet back into obscurity.

We're pretty sure that the people who jumped in yesterday don't want to see that.

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