Shareholders of Japanese robotics and tech giant Cyberdyne (CYBQY) (not to be confused with the same-named machine manufacturer of the Terminator movie series) could be in for their own judgment day, as the company's at risk of losing about 70% of its $247 billion market cap in just 12 months, short-seller Andrew Left told Real Money.
Shares of the maker of powered exoskeletons, which are designed to assist users with physical disabilities, are down about 9% on Japanese exchanges since Left published an Aug. 16 note on his firm Citron Research's website, labeling Cyberdyne "the most ridiculously priced stock in the world." (Left has a short position against Cyberdyne stock.)
Left's argument: The firm's CEO, Dr. Yoshiyuki Sankai, is "deceiving investors" by claiming the latest iteration of its Hybrid Assistive Limb exoskeleton technology, or HAL 5, is the only such device covered by public health insurance. Left noted that the company also has made little if any progress in obtaining approval by the U.S. Food and Drug Administration.
"I believe they never submitted anything to the FDA," Left said in a Thursday phone interview with Real Money. "I'm going to prove beyond a shadow of a doubt they've been lying to investors," he added.
Cyberdyne did not immediately respond to Real Money's request for comment but was quick to respond last month to Left's allegations, noting in an Aug. 19 report that the data provided by Left are "missing crucial details regarding the company and also (include) several incorrect statements," and noting the company was wrongly compared with incomparable makers of similar devices in Left's analysis.
Left most recently has criticized a bullish Nomura report Thursday, in which analysts reiterated their Buy rating on the stock, which centers on the progress Cyberdyne has made in having its treatment covered by health insurance in Japan, and is now "in negotiations to gain approval of HAL as a novel medical device in the U.S." The analysts also said Cyberdyne has been in negotiations with the FDA over whether its HAL treatment should be reviewed as a "de novo" novel medical device.
But Left says an April 11 article published by The Japan Times shows Cyberdyne has already obtained health coverage in Japan for its devices,and that Nomura's report is not based on any material developments in U.S. markets but rather speculation.
Left also argues that Sankai's statement that "HAL is the only device in the world covered by public medical insurance" is a blatant "falsehood," with industry peer ReWalk (RWLK) , a rival with a market cap of less than $100 million, covered by health insurance plans in both the U.S. and Germany.
The FDA did announce in June 2014 that Rewalk is the "first motorized device intended to act as an exoskeleton for people with lower body paralysis" and that the roughly 200,000 people in the U.S. living with spinal-cord injuries could stand to gain from ReWalk's treatment.
Shares of Cyberdyne are down about 8% so far on the year.