Traders will bear in mind Longeveron (NASDAQ:LGVN) as a late 2021 meme inventory. The biopharmaceutical firm briefly shot to market prominence in late November 2021 earlier than starting a gradual decline. LGVN inventory has spent the previous few months transferring steadily downward with little company-specific information. Tomorrow, nonetheless, Longeveron reviews fourth-quarter 2021 earnings. Shares have been rising in anticipation.
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This morning started with LGVN inventory taking pictures up. Whereas it was fast to dip, shares have since rebounded. As of this writing, the inventory is up greater than 6% for the day and appears to be pushing steadily upward. Shares rose greater than 15% in premarket buying and selling as effectively.
Pre-earnings report spikes must be anticipated. In relation to small-cap corporations like Longeveron, although, progress sustainability is an ever-present query. And on this case, the reply could also be that progress just isn’t sustainable in spite of everything.
What’s Taking place with LGVN Inventory?
Longeveron’s historical past is probably going not reassuring to buyers. Following it’s late 2021 spike, InvestorPlace contributor Stavros Georgiadis described the identify as “one other biotech inventory with a roller-coaster-style value swing.” Georgiadis went on to quote the corporate’s “unsustainable rally buying and selling” as purpose for buyers to keep away from it.
These kinds of developments should not unusual for small- and micro-cap shares. They’re additionally synonymous with the biotech sector, a house to many corporations whose progress is commonly pushed by scientific trial momentum. If a biopharma firm encounters a setback in a drug or therapy trial, the information can ship shares down as rapidly as they rose.
Like all pharmaceutical producers, Longeveron has initiatives in its pipeline. However it has additionally been some time since buyers noticed any favorable protection indicating the corporate is likely to be near a breakthrough. Longeveron’s mobile therapies largely take care of anti-aging. Whereas there’s loads of demand for such merchandise, progress on transferring any of them ahead hasn’t been reported since early January.
What It Means
This doesn’t imply that Longeveron gained’t announce an vital growth quickly. Nonetheless, till the corporate does, buyers is likely to be clever to proceed with warning given LGVN inventory’s unstable historical past. An enormous drawback with former meme shares is that it may be exhausting to guage their potential to start out rising once more.
Except the corporate reviews one thing vital in tomorrow’s earnings name, it’s unlikely we’ll see LGVN hold rising. The corporate doesn’t appear to have any catalysts to report that would push the fill up. Moreover, the web buyers who helped drive meme shares up beforehand are doubtless preoccupied with different issues proper now. There’s little to attract them to the biopharma sector and even much less to attract them to Longeveron. The corporate hasn’t given Wall Avenue a lot purpose to concentrate.
Traders ought to regulate LGVN inventory previous to the earnings name, however take into account that it’s doubtless about to fall again into the crimson.
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On the date of publication, Samuel O’Brient didn’t maintain (both instantly or not directly) any positions within the securities talked about on this article. The opinions expressed on this article are these of the author, topic to the InvestorPlace.com Publishing Guidelines.
