On July 16th, Aptose or NASDAQ: APTO announced that they will have a public offering of 10.5 million shares at $5.25 per on July 20th.
What does this mean?
Basically, a company will sell shares of their own stock to raise capital in a public offering. This is usually something small-caps go through with if they are not making money or need more capital for operations. In APTO's case, they are running out of cash, and this isn't the first time they've done a public offering. Seeking Alpha mentions that approximately $55 million to be raised in the offering.
What is Aptose Biosciences?
ATPO is a clinical-stage biotech that works in the field of oncology, or treating tumors. Looking at the past 4 years, they have not made a profit like most biotechs because of the amount of spending each company has to undertake in their clinical-trial stages.
Their cash flow looks like the source of their problems. Financing cash flow left at $436,000 in March with all other areas negative except end cash position. The fact that the company is undergoing another public offer must mean that they still haven't gathered enough cash or need a lot more. $55 million should help pad expenses for their CG-806 and APTO-253 clinical trials next quarter or maybe further down the road.
What I think
Since the offering is at $5.25 per share, it's expected to see the price drop. However, there is something I looked at that could be a good sign for Aptose.
Almost 40% of the stock is owned by institutions, and Q2 saw a lot of increases of institutional stakes betting on this company. A good thing about institutional ownership is that it can limit price volatility since it's unlikely smart money will decide to buy up shares and dump it all the next quarter. $22 million bought by institutions also shows investor interest which could mean APTO is getting close to a clinical breakthrough. But that is pure speculation that I made so take that with a grain of salt.
The stock looks like it's just about oversold on the 14-Day RSI chart, and price dips under the 200 Day Moving Average after trading above it since November of last year. Patterns on the RSI show that the stock could be gearing for another swing to the upside. If APTO's RSI slides under 30, it could be something to consider buying. On Marketbeat, analysts give this stock a buy rating with an $11.40 Price Target the past two quarters.
Thanks for reading! If you are interested in joining our trading community, we have chat rooms, trade alerts from our top traders, and educational content. You can join using the link below, and get a discount on your membership.
Please note that this email is my personal opinion only. I am not a licensed financial advisor, and any information shared or discussed is not to be construed as investment advice. Trading and investing involves a degree of risk, and is not suitable to all investors. Please consult with your financial advisor before making any sort of investment decisions.
9/24/2021 The People's Bank of China banned all crypto transactions on overseas Chinese services along with its domestic ban. Bitcoin is down over 8% today and Ethereum is down 11.48%. Our outlook I think we're seeing a lot of noise around China and their condemning of cryptocurrencies before they digitize their own. In the short […]
Let's look into the Bank of England's Monetary Policy Summary which took place on Thursday the 23rd of September, 2021. Quick Summary: BoE keeps interest rates unchanged at 0.10% BoE will maintain its asset purchasing target at £875B The vote to keep policy unchanged passed with a 7-2 vote The minutes of the MPC meeting […]
9/23/2021 The precious metal snapped three days of gains and tumbled back down to the support range from $1740s-1760s approximately. Gold is down -.56% on the day going into the opening of the NY session. Our outlook Gold will likely rise on the US indices falling, and is usually due to slowing economic growth. Because […]
9/21/2021 Bitcoin Update For the past month, Bitcoin went on a tear rising over 20% from the beginning of August. Recently, however, China and other risk-off factors have contributed to a 23% decline from the recent highs around $52,760. Now the most prominent crypto has touched these monthly lows which could be a potentially good […]