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Stereotaxis’ 344 Percent Gain Last Week Likely Overdone (STXS)

Stereotaxis (NASDAQ: STXS) moved 74 percent higher Friday on continued optimism over FDA approval of its Vdrive Robotic Navigation System. It makes last week’s move an impressive 344 percent. 

(It should also be noted that much of the move could be attributed to a massive short squeeze to unwind the 22 percent short interest in the stock.)

This is clearly great news for the $59 million company. Not only is the FDA approval a major potential revenue driver, it also makes the company a potential takeover target.

But there are problems. First, the medical device market is not like the pharmaceutical industry. Medical devices, with their high cost, are often slow to catch on and often, they don’t meet investor expectations, especially when those expectations result in a 344 percent buy-in.

Next, the company is making progress decreasing expenses, as laid out in this Seeking Alpha article, but it’s still an unprofitable company.

Finally, the company received notice that its being delisted from NASDAQ in September. The company continues to have headwinds and while the positive news around Vdrive is positive, the approval is only the first step.

Breaking Finance News has been all over this story. Read our coverage below:

Why Stereotaxis is up 26 Percent Friday (STXS)

Why Stereotaxis is up 200 Percent Tuesday (STXS)


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Disclosure: At the time of this writing, the author had no position in the company mentioned.



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