Welcome back from the weekend, everybody. We've got quite a bit to get through today, so let's just take it from the top and let you know Radient Technologies (RDDTF, RTI.V) shares soared more than 20% today on the heels of news that it's going to raise $6 million at a very palatable price. And, none other than Aurora Cannabis (ACB.V) was chipping in as much as $1.2 million to become not just a partner, but an investor.
The name should ring a bell. Aurora Cannabis is the company that first expressed interest in Radient Technologies' capabilities as an extractor of cannabis oils a couple of months ago. Aurora didn't make a firm commitment to Radient at the time, wanting to further explore the company's capabilities before digging in. Apparently it's become convinced in the meantime. Aurora Cannabis is willing to buy a pretty big piece of the offering at a price of $0.45 per share. The deal also offers warrants to buy more RTI shares at $0.70 down the road, which the stock (the Canadian shares, not the US-listed OTC shares) just eclipsed today.
What's so interesting is what this likely means. Although Aurora and Radient have both been talking around a potential partnership for a couple of months now, neither has confirmed any kind of deal has been inked. However, with Aurora putting its money where its mouth is, so to speak, clearly there's something the company has a lot of faith in. Maybe there's some sort of exclusivity? We'll see. Just sayin', sometimes you have to read between the lines.
The technology in question, by the way, is an ingredient-extraction process called microwave assisted processing, or "MAP," for short. As the name implies, the use of radio microwaves helps the extraction process along.
With current approaches to create ingredients from an appropriate source, the material with the target compound or molecule in it is soaked in a solvent, heated to 50 degrees Celsius (or more), and over the course of several hours, the desired ingredient diffuses into the solvent. After filtration, drying, and other processing, that ingredient is finally isolated and then collected.
It works, but it's hardly ideal. Aside from the fact that this technique doesn't work very well at large scale, yields are relatively low. Worse, a lot of things you don't want to extract can still be found in the extract, lowering the quality and purity of the ingredient.
Radient Technologies' microwave assisted processing changes all of this.
Using its patented MAP process, Radient is able to selectively deposit microwave energy into a biomass (source material) and heat the target elements while leaving other materials in the mix unaltered. The near-instantaneous "in-core" heating that occurs creates pressure which drives out the target compound much faster than more conventional extraction methods. In fact, the pressure-driven process outperforms the conventional extraction on pretty much every front. That is, the technique reduces the extraction time from hours to minutes, delivers a higher active ingredient purity, increases the recovery of actives from often scarce biomass, and uses much less solvent and energy than the more typical approach.
Anyway, we're looking forward to seeing this company reach its full stride. And, given the way the stock's acting, the market isn't waiting to see how things work out. Traders were already making their bets, but pulled that trigger in earnest Monday. You might want to take the hint before it completely gets away from you.
On other fronts, Staffing 360 Solutions (STAF) has named Christopher J. Lutzo as its general counsel.
An in-house attorney is a new position for Staffing 360 Solutions, and Lutzo certainly has the chops to take care of this fast-growing company. He's been a lawyer for more than 25 years, and has deep experience in M&A and financial transactions. He's the former counsel of Axiom Global as well as Smith & Wesson. It's good that STAF has his experience and expertise now. The company's getting real big, real fast, yet it aims to complete several more mergers before it's all said and done.
Speaking of Featured Stocks, we're going to have a new one for you not Tuesday morning, but Wednesday morning -- there are a couple more i's we want to dot and t's we want to cross. Then we have another one coming to you on Thursday morning. Wednesday's is a biotech company with a couple of trial updates due before the end of the first quarter. Thursday's new trading idea is precious metals miner. Both groups have been outstanding performers of late.
Finally, this market.... ugh. It just won't die. The bulls don't realize how high up off the ground they are without a net, and without any fundamental justification for where stocks are currently priced. Or, maybe it would be more accurate to say there just aren't any bears willing to get in the way. They're all doing what we're doing, which is waiting for the few bulls that are left to turn around and realize the mistake they made by pushing stocks this high as fast as they did.
There is evidence that there just aren't as many bulls participating in this rally as you might suspect, given the size of the gain. It's volume. There's just not a whole lot of it, and what little there is almost seems to be waning the higher we go. We can see it on the chart of the NASDAQ as well as the Dow Jones Industrial Average.
Still, the train is chugging along. Any bet against the market now is a bet against the grain, and a bet that something specific pulls the rug out from underneath this overextended market. Timing will be the key. You don't want to step in front of a moving bus.
There's also a pretty thick layer of support for the S&P 500 all between 2256 and 2290. We NEED a pullback below that level, but that's going to take a lot of work and the bulls are going to have to NOT put up the same fight they've been putting up of late.
If that floor/zone does fail as support though, there's not a lot left to prop the market up until you get to the 200-day moving average line currently at 2166.6.
Things are getting real interesting.
The other dimension is the market's fundamentals, which as we told you last week we'd be able to update this week. We may get to it tomorrow, but if not on Tuesday, we'll have that Q4 earnings update for you on Friday. Wednesday and Thursday are already earmarked for new trading suggestions.