Biolase's Korean Question

Biolase (BLTI Quote - Cramer on BLTI - Stock Picks), a company bent on taking the fear out of dentistry, seems reluctant to open its own mouth lately.

Just take a look at what happened during the company's latest conference call.

Lazard Freres analyst Alexander Arrow noted last month that Biolase had relied on a single customer for at least 10% of its sales during the previous quarter. Arrow asked where that business had come from.

At first, Biolase refused to elaborate. Only after another analyst identified the customer did the company actually provide the information.

"Scott Jorgensen (a Biolase executive) has sent me an email indicating that that was Point Medical of Korea," analyst Austin Hopper announced near the end of the call. "I just want to make sure that that is still correct."

Biolase CEO Jeffrey Jones seemed taken aback.

"Well, then it sounds like we have disclosed it," Jones conceded. "So, yes, it's Point Medical in Korea."

The exchange is important because Biolase short-sellers -- investors who bet against the stock -- believe that Point Medical's aggressive sales tactics are all that stands between Biolase and a big sales shortfall.

Now the shorts are saying a key industry trade association may try to rein in the distributor. They believe any setback for Point Medical could hammer Biolase sales and punish its shares.

Shares of Biolase, which fetched nearly $8 before the company's latest update, have broken down in recent weeks. They set a 52-week low Thursday at $5.32.

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