Some housekeeping
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Harrow Health
HROW fell 36% on Tuesday after a poor Q3 2023 report and revised earnings. The stock, which traded at $27 just last May, is at its one-year low, just $8.21, and the market cap a miserable $288 mln.
But there is more to go. We do not believe this eye-care pharma company will ever yield value for shareholders. Short sellers have publicly attacked HROW twice, but it continues to bounce back, and executives get shares and consulting contracts, while shareholders get losses.
HROW looks like little more than a promotional vehicle to enrich a group of insiders. In its eagerness to make money for insiders, HROW plays fast and loose with patient safety, but even this does not produce profits. The company's financial instability is evident in its Q3 2023 report, which showed that interest expense for the first nine months of the year ballooned to $16.2 mln, some three times higher than pre-interest income from operations of just $5.3 mln. HROW now faces crippling debt and will struggle to make interest payments. Many years of losing money and shifting business strategies indicate that HROW will simply milk shareholders until they no longer agree to be milked.
HROW executives are still trying to promote the stock. With an annualized run rate of around $109 mln in revenue for 2023, HROW has told investors it will have “at least” $1 bln in revenue by 2027 based on the current portfolio. But the company has repeatedly made promises to hit high revenue targets and repeatedly failed to do so.
The company went public via reverse merger and was originally supported by Barry Honig, a notorious stock promoter. HROW is a train wreck. We are baffled as to why anyone would buy this stock.