Larry N Feinberg, Oracle Associates Open Activist Position in BIOLASE

Larry N Feinberg, the manager of Oracle Associates, has opened a position in BIOLASE Inc (NASDAQ:BIOL). In a recent filing with the Securities and Exchange Commission, Mr. Feinberg disclosed ownership of 3,447,331 shares, which correspond to 9.89% of the company’s common stock.

BIOLASE engages in the production and sale of lasers used in medicinal practice. The stock price had been in an uptrend since the start of the year, advancing by 230% to an April high of $5.9 per share. The price has been trending down ever since, with shares currently traded at $1.8 apiece. BIOLASE has a market cap of $144 million and the stock has a beta of 2.55, which makes it a fairly volatile one. The company does not pay a dividend.

The drop in share price was not unwarranted. BIOLASE has registered poor financial results in the third quarter of 2013. The company reported revenues of $12.3 million, down from $13.8 million for the same period of 2012. The loss per share increased from $0.02 reported for Q3 of 2012 to $0.13 per share during the last quarter.

On November 11, BIOLASE announced that its board of directors has allowed the company to hire an investment bank in order to explore the possibility of a merger or acquisition. Federico Pignatelli, Chairman and CEO of BIOLASE, said:

The Company is currently valued at approximately one-times revenue, and we believe that certain of its assets could be worth significantly more.

BIOLASE has already begun the process of interviewing and evaluating several investment banks and is committed to conducting a review of potential opportunities as promptly as practicable; however, there can be no assurance that any particular opportunity will be pursued or that any transaction will occur, or on what terms or as to the timing.

Disclosure: none

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