Three in any other case innocuous phrases — reverse inventory break up — may cause a lot disappointment and even sow panic in an investor group. Shareholders of clinical-stage biotech Agenus (NASDAQ: AGEN) skilled this vividly on Thursday when their firm introduced its intention to begin happening that highway. The inventory’s value fell sharply, by virtually 30%, contrasting with the 0.6% achieve of the benchmark S&P 500 index.
Twenty shares will change into one
In a regulatory submitting and a letter to its shareholders, each printed Thursday, Agenus revealed that it’s searching for a reverse inventory break up. The proposed ratio is one share of the biotech firm’s frequent inventory for every 20 at the moment held. The transfer is topic to an investor vote, which is to happen at a particular shareholder assembly set for April 3.
As is common in such conditions, the important thing impetus behind Agenus’ proposal is the need to push the corporate’s market value over $1 per share. That is the minimal mandated by the Nasdaq, the alternate on which the inventory is at the moment traded.
The sharply damaging response to the information makes this extra pressing; Agenus’s share value now stands at barely over $0.65 per share.
Traders had been skeptical
With the transfer, Agenus hopes to purchase adequate time to make notable progress in its operations.
Within the shareholder letter, the corporate wrote that its intentions are attaining “key close to time period milestones, together with submitting our first Biologics License Utility (BLA) for metastatic colorectal most cancers, prioritizing different scientific packages with the potential for speedy approval, and prudently allocating sources as we search to realize our objectives.”
A reverse inventory break up is sort of the lever to tug, nevertheless. Many buyers think about such a transfer to be a desperation play aimed toward conserving a failing enterprise above water. Agenus must labor laborious to persuade the market of its post-reverse share break up viability.
Must you make investments $1,000 in Agenus proper now?
Before you purchase inventory in Agenus, think about this:
The Motley Idiot Inventory Advisor analyst staff simply recognized what they consider are the 10 finest shares for buyers to purchase now… and Agenus wasn’t one in every of them. The ten shares that made the reduce might produce monster returns within the coming years.
Inventory Advisor supplies buyers with an easy-to-follow blueprint for fulfillment, together with steering on constructing a portfolio, common updates from analysts, and two new inventory picks every month. The Inventory Advisor service has greater than tripled the return of S&P 500 since 2002*.
*Inventory Advisor returns as of February 12, 2024
Eric Volkman has no place in any of the shares talked about. The Motley Idiot recommends Nasdaq. The Motley Idiot has a disclosure coverage.
Why Agenus Inventory Plummeted by Almost 30% on Its Inventory Break up Information Right now was initially printed by The Motley Idiot
