[speak] ThurmSpeaks::Buying Stock in America on September 11th

Our stock account didn't have much cash in it, but I wanted buy stock in America on 9/11/2010. Because the markets are closed on Saturday, I had to place the following limit order on 9/10/2010.

   Buy 125 shares of NSPH at $3.14 per share.

   Scottrade executed the order immediately, 
   but it was executed in three chunks.*

   buy  23 nsph @ $3.13 completed
   buy 100 nsph @ $3.13 completed
   buy   2 nsph @ $3.12 completed

   * NSPH is a thinly traded stock.

NSPH is the stock symbol of Northbrook, Illinois-based Nanosphere, Inc. In a nutshell, Nanosphere is a nanotechnology-based healthcare company that "develops, manufactures, and markets a molecular diagnostics platform that enables genomic and protein testing on a single platform." Nanosphere was founded in the year 2000.

I learned about Nanosphere on 27 April 2007 when Obama announced PCAST. Chad A. Mirkin is on the Nanosphere Board of Directors. Mirkin is the Director of the Northwestern University Institute for Nanotechnology. On 27 April 2009, President Barack Obama announced the "President's Council of Advisors on Science and Technology (PCAST)." PCAST has twenty members and one of those members is Chad Mirkin. On 28 April 2009, after looking more closely at Nanosphere, Inc., I bought 125 shares of NSPH at $3.35 per share. In other words, on 11 September 2010, almost a year and half later, our NSPH shares -- to use housing industry jargon -- were underwater.

Some "Key Statistics" on Nanosphere mined from Finance.Yahoo.com on 11 September 2010.

                revenue:  $2.90M   (trailing 12 months)
             total cash:  $57.74M
         cash per share:  $ 2.03
             total debt:  $ 1.28M
    operating cash flow:  negative
         free cash flow:  negative
   short interest ratio:  13.6
            # employees:  ~105

   40% of the stock is closely held
   93% of the float is held by institutional 
                       and mutual fund owners

When it comes to nanotechnology/nanoscience, intellectual property is important. On 10 September 2010, Nanosphere had approximately 80 issued patents and 150 pending patent applications. The company also had an "exclusive licensing agreement with Northwestern University that provides access to additional technology development in the area of nanoparticle probes."

Owning Nanosphere Stock Reeks of Risks

SeekAlpha.com::Nanosphere 2Q 2010 Earnings Call Transcript on 5 August 2010

   Bill Moffitt (CEO): "Now we'd be happy to take your questions. 
                        And I'll turn the call back over to Kaleen."
   Kaleen: "There are no questions in the queue at this time."
   Moffitt: "Kaleen, if there are no questions, then we will 
             conclude the call at this time. And thank everyone 
             for joining us."

Zero questions during an earnings call probably implies this stock doesn't have much of an "analyst" following. [And this is probably a good thing.]

Nanoshere is a femto-sized company that will constantly be involved in intellectual property disputes; navigating FDA regulatory roadblocks; and dealing with 20th century political dinosaurs. Nanosphere markets itself as a healthcare company; consequently, the healthcare reform that is currently being implemented by the federal government places the company in a business environment wrought with uncertainties. Nanosphere will have to constantly pump money into RDD&D (research, development, demonstration, and deployment) and it will forever have to employ and keep happy expensive scientists/researchers/technologists. The cost of doing business for Nanosphere will never be cheap.

Sadly, risk/reward ratios these days are too close to one to warrant buying a stock like NSPH, but dummies like me buy stock in companies like Nanosphere, Inc.

NSPH Prices Since Going Public
   01 November  2007:  $14.00 (opening price)
   05 November  2007:  $22.04 (intra-day high)
   31 December  2007:  $13.99 (closing price)

   31 July      2008:  $10.47 (intra-day high)
   11 September 2008:  $ 8.06 (intra-day high)
   19 September 2008:  $11.33 (intra-day high)
   27 October   2008:  $ 3.04 (intra-day low)
   17 December  2008:  $ 7.58 (intra-day high)
   31 December  2008:  $ 4.35 (closing price)

   05 March     2009:  $ 2.71 (intra-day low)
   28 April     2009:  $ 3.35 (bought; Mirkin joins PCAST)
   04 May       2009:  $ 3.35 (bought)
   31 July      2009:  $ 7.96 (intra-day high)
   11 September 2009:  $ 7.51 (closing price)
   14 October   2009:  $ 7.85 (intra-day high)
   31 December  2009:  $ 6.44 (closing price)

   04 March     2010:  $ 3.15 (intra-day low)
   04 March     2010:  $ 3.20 (bought)
   21 June      2010:  $ 5.63 (intra-day high)
   19 August    2010:  $ 3.12 (bought)
   31 August    2010:  $ 2.91 (intra-day low)
   10 September 2010:  $ 3.13 (bought)

Creator: Gerald Thurman [gthurman@gmail.com]
Created: 10 September 2010