Is There Any Value In A Delcath Systems, Inc. (NASDAQ:DCTH) Punt?

Delcath Systems, Inc. (NASDAQ:DCTH) has been a messy stock to be involved in recently. The company drew the attention of traders earlier on this year ­when shareholders voted down a reverse split and sent the stock flying. A second vote look like it might do the same this month, but while the outcome was similar to that of the first, the response wasn't – management announced a voluntary delisting almost immediately subsequent to the vote outcome being released and said delisting put considerable pressure share price. DCTH Daily ChartFast-forward to the end of last week and the latest twist in the tale is that CEO Simpson and her team have created some preferred shares, used them to raise $500,000 (presumably necessary to keep the lights on) and will be conducting a reverse split, despite shareholders voting it down twice, on the justification that a bunch of convertible note holders now have amended rights that sees them able to approve a reverse split regardless of common shareholder sentiment surrounding the matter.Surely, then, this is one to stay away from for now?Well, not necessarily.Right now, Delcath is trading for $0.05 a share. That's close to a 90% discount to the price at which the company opened 2017. It's got a market capitalization of just $28 million. From operational perspective (and we are talking about scientific pipeline here, research and development) things haven't really changed much over the last six months.Delcath's core technology, the Chemosat delivery system, remains approved and at-market in Europe and is (albeit slowly) pushing towards commercialization in the US. Revenues from the product are not particularly high ($584,000, $743,000 and $676,000 for second quarter 2017, first quarter 2017 and fourth quarter 2016 respectively) but there is value there from an intellectual property perspective and with the right strategy, there's real potential to boost demand in a range of different oncology indications globally.Of course, even with this program considered, things aren't going to simply turn around for Delcath.So where is the opportunity?This is a stock that people are lining up to short sell. A large portion of the shorts will be lining up positions ahead of the upcoming reverse split and, potentially, something worse (read: bankruptcy). With this in mind, it's not going to take much to start forcing the shorts out of their positions and pushing them to run for cover. In other words, there is a very real chance that we could see a short squeeze in Delcath and, if we do, it could and should be pretty substantial.So we need a catalyst for said squeeze, where is a catalyst coming from?In a word, partnership. We have said on a number of occasions that this company looked as though it might be a prime target for a buyout but, given recent developments, it's looking more and more likely that a partnership might be a preferable way forward in the US. If Delcath can secure a partner and, with it, some funding to push forward its development program in the US, then the announcing of said partnership would be more than enough to spark a near-term view to in sentiment and the sort of squeeze we are looking for.Sure, this is a speculative play. The company doesn't have the money it needs right now to get product anywhere near the market in the US, even with access to the restricted cash that management repeatedly highlighted as a driver behind it seeking authority to raise the number of shares a connection. As such, a partnership (or buyout, but we've already discussed this) is a sort of last chance saloon for Delcath and its shareholders. The risk of no such partnership materializing is substantial.With that said, so is the reward that's on offer on a punt at current prices.Here's our previous coverage of Delcath. We will be updating our subscribers as soon as we know more. For the latest updates on DCTH, sign up below!Image courtesy of Travis Wise via FlickrDisclosure: We have no position in DCTH and have not been compensated for this article.