[ad_1]
Three innocuous words, reverse stock split, can cause great disappointment and even panic among the investor community.Shareholders in clinical stage biotechs Agenas (NASDAQ:AGEN) He experienced this firsthand on Thursday when the company announced its intention to start down that path. The stock plunged nearly 30%, compared with a 0.6% rise in the benchmark. S&P500 index.
20 shares become 1 share
In a regulatory filing and a letter to shareholders issued Thursday, Agenus disclosed that it is seeking a reverse stock split. The proposed ratio would be one share for every 20 shares of biotechnology company common stock currently held. The move requires a vote from investors, which will take place at an EGM scheduled for April 3.
As always in situations like this, the main driver behind Agenas’ proposal is a desire to push the company’s market price above $1 per share.This is the minimum required by law Nasdaqthe exchange where the stock is currently traded.
The extremely negative reaction to this news makes this issue even more urgent. Agenas stock price is currently just above $0.65 per share.
investors were skeptical
With this move, Agenas hopes to buy enough time to make significant progress in the business.
In a letter to shareholders, the company said its intention is to “submit an initial Biologics License Application (BLA) for metastatic colorectal cancer, prioritize other clinical programs with potential for expedited approval; and achieving key near-term milestones, including the prudent allocation of resources.” We aim to achieve our goals. ”
However, a reverse stock split is a very powerful tool. Many investors believe such moves are desperate measures aimed at keeping failing businesses above water. Agenas will have to work hard to convince the market of its viability after the reverse stock split.
Should you invest $1,000 in Agenus now?
Before purchasing Agenus stock, consider the following:
of Motley Fool Stock Advisor Our analyst team has identified what they believe Best 10 stocks Investors can buy now…and Agenus wasn’t one of them. These 10 stocks have the potential to generate impressive returns over the next few years.
stock advisor We provide investors with an easy-to-understand blueprint for success, including guidance on portfolio construction, regular updates from analysts, and two new stocks every month.of stock advisor Since 2002, the service has more than tripled S&P 500 returns*.
See 10 stocks
*Stock Advisor will return as of February 12, 2024
Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends NASDAQ. The Motley Fool has a disclosure policy.
Why Agenus stock plummeted nearly 30% after stock split Today’s story was originally published by The Motley Fool.
[ad_2]
Source link
