MSP Recovery (NASDAQ: LIFW) stock is up 34% yesterday. LIFW stock is also down 74% over the past month. Given that that period includes the effects of a one for 25 reverse stock split that’s not, in fact, a good performance. Well, 74% down over 30 days just isn’t a good performance at all. We’d tend to put this latest rise down to the dead cat factor - drop something from high enough, even a dead cat, and it will bounce at least once. Now it’s true that the CEO picked up near half a million shares and that might well be the trigger for this price rise. Insider buying can be seen as a signal after all. On the other hand that’s not exactly a large purchase, it’s almost ritual these days that a CEO should have at least such a position.
We’ve talked before about MSP Recovery: “The business line is: “MSP Recovery, Inc., doing business as LifeWallet, operates as a healthcare recoveries and data analytics company in the United States and Puerto Rico. The company offers claims recovery services, including services to related parties or third parties to assist entities with pursuit of claims recovery rights. It is also developing LifeWallet, a platform for real-time analytics at the point of care which helps in identifying the primary insurer and assisting providers in receiving customary rates for accident-related treatment.” There’s more to it than that. There have been mutterings - and admissions - of not quite proper accounting. That’s led to a class action lawsuit and then its dropping.”
That little problemette with the accounting led to the LIFW stock price dropping from $10 to under a $ pretty much overnight.
MSP Recovery stock price from Google Finance
To make sense of that chart we also need to know this about LIFW stock: “The full announcement: “MSP Recovery, Inc. (LIFW) will effect a one-for-twenty-five (1-25) reverse split of its Class A Common Stock. The reverse stock split will become effective on Friday, October 13, 2023.” “ The other thing for us to note is that the MSP stock price is down 66% again from the level reached after that reverse stock split.
The general bet is that this isn’t going to get better. There’s still a 13% short position for example. Now, it is vaguely possible that there will be a business turnaround. You know, maybe? Or there’s that alternative, just that dead cat bounce on the way down.