Rewalk Slips Lower On Cyberdyne Report

TM Editors' Note: This article discusses a microcap. Such stocks can be easily manipulated; do your own careful due diligence.

Look for Rewalk Robotics (Nasdaq:RWLK) to continue to move lower this week in sympathy with Japanese robotics firm Cyberdyne (CYBQY). Cyberdyne slipped nearly 7% lower during trading after short-seller Citron published slammed Citron's assistive technology products as too pricey and cited a declining market for the firm's technology.

Andrew Left's firm Citron has already amply demonstrated its ability to move tech stocks. Last year a report from the firm sent Valeant Pharmaceuticals (VRX) stock sliding when it dubbed the firm the "next Enron." In its report on Cyberdyne, the firm said that the stock could lose 86% of its value. While Cyberdyne has balked at the accusations that its products are too pricey for the market, negative reports from groups like Citron and Glaucus Research Group continue to put pressure on the firm.

Like Cyberdyne, Rewalk has been struggling to compete in recent months. Rewalk's earnings, released last week, reveal a firm under pressure from increases in marketing costs and stiff competition. Already feeling pressure from disappointing earnings, factors like a decline in operating margins and large one-time expenditures will only be heightened by Citron's latest report.

By getting short Rewalk, U.S. traders can ride the wave of pressure that Citron's negative report will put on the robotics and assistive tech industry in the days ahead. Rewalk is already trading lower in today's session and we see this downward pressure creating an attractive opportunity for investors to get short the stock and profit from Citron's indictment of Rewalk's peer Cyberdyne.

Disclosure: We are short Rewalk Robotics.

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