diaDexus, Inc. (OTC:DDXS) Enters Strong Into 2011
06 Jan 2011

After experiencing an all-year low on its share prices, now diaDexus, Inc. (OTC:DDXS) is on the rise again. As a company, focused on producing diagnostics products, addressing the cardiovascular disease, it is common to have an increase or decrease in stock prices upon the completion of testing new products. Not the case here, though, and what is more there were no stock promotions, company announcements or other type of catalysts that could have sparkled the interest of traders since end-December.

In fact, diaDexus is no stranger to rapid changes in share prices and traded volumes. A perfect example of this is Dec.27th, last year, when trading session opened at $0.25 per share and closed at $0.25, which might appear normal, but a closer look at the stock volume reveals a different picture. It was the highest in 2010 with more than 3.4 million shares traded for a day. Again, there is nothing particular that could have initiated such aggressive trading activity.
Actually, it was after Dec.27th when the steady increase in share prices began. Little by little and without such intense trading action, the stock price went up from opening at $0.255 on the 28th to closing at $0.44 yesterday. If this upward movement had remained stable for two more days, the price might have reached the levels from the beginning of 2010, but this largely depends on the source of that started it. Having in mind the total absence of any immediate factors usually responsible for such rises, it is fair to assume that it might have been speculations and rumors acting as a fuel for what followed after Dec. 27th.

Unlike the recent development in stock prices, the financial statements of the company do not inspire much optimism. As mentioned in the last 10-Q report issued Oct. 2010, diaDexus has an accumulated deficit of over $185 million and a working capital of a bit more than $23 million. Although the working capital might be enough in the near future, it is by no means sufficient to sustain the company for more than a year. Debt financing might be a choice, as well as sale of stock.
All in all, if no new successfully tested products are introduced to the market, share prices would repeat their disastrous fall of 2010, which, unlike the last positive movement on the market, might last not days, but months and years, as it did in the past.

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