$PVCT: Get Shorty (Update)

Did short interest drop from the February 15 reporting period? No. Short interest at 2/28/13 (~1.70 million) increased by ~8% over 2/15/13 (1.58 million). The closing share price, over the same period, increased ~27% from $0.62 to $0.79.

Volume has definitely ticked up of late. Regardless of which numbers you use for trading data, the trend line is upward sloping. Note the average monthly volume from Yahoo! Finance (and other monthly numbers) below since January 2012. The closing share price is approaching that last seen in June. Average daily volume is nearly to more than 3 times that of the last several months.

With very limited data, volume has picked up since the release of Moffitt's AACR abstract, which was released about midway through the trading day.

At 9/30/12, the last 10-Q identified 2,941,665 of convertible preferred stock. Revelation ended 2012 with 816,134 shares of such stock (I think the figure reported in the firm's Form 13G is unconverted preferred stock; thus, it must be converted into common stock before it can be sold).

In speaking with Peter last year, and also with equity traders, it seems an "artificial short" is created by the process of convertible preferred shareholders converting their holdings of this security into common stock (which they ultimately or immediately sell). Last year, short interest rose when Revelation was converting much of their preferred stock. Depending on the share certificate transfer process, the quality of the transfer agent, etc., the duration of the artificial short can be swift or lengthy.

One usually associates rising short interest with a falling share price. Short interest and share price are rising together. Is the increasing short interest artificially high because more of the convertible preferred stock issued in March 2010 was converted? The next short interest reporting period of 3/15/13 will be reported March 26. The 10-Q share balances for 1Q13 will be reported around mid-May. By then, all of this navel gazing may and probably will result simply in more fuzz.

Shouldn't the conversion and sale of preferred stock push the price down? For all that selling, there has been buying. And at some point, these preferred stock shareholders run out of stock to sell. Nevertheless, we sadly bid farewell to these preferred stock folks: "Alpha Mike Foxtrot."

Who's buying? Volume, of late, the last few days to be more specific, look more like institutional buying. I speculate a life sciences fund has stepped off the sideline and dipped a toe in the water; however, I cannot confirm such speculation with either Porter, Levay & Rose or Peter. Peter said understanding PV-10's clinical relevance was critical to life sciences investors. Let's see how the rest of this week turns out.

It sounds like progress is continuing to be made towards a China deal, with serious interest I think being drawn from between 5 and 10 partners; however, I think the earliest we can expect to learn about exactly where things stand should be the week of March 18.