Increasingly, other investors appear to agree. If it looks, smells, and quacks like a duck, it’s probably best to let it waddle away into the sunset. When it comes to micro-cap and novel coronavirus play iBio Inc. (NYSE:IBIO), investors are being warned in more than one way when it comes to IBIO stock. Let me explain.
The Covid-19 outbreak has caused a good deal of heartbreak and difficulties to say the least. Problems ranging from the economic impact to people’s health is still a problem many are facing. As well, some investors are challenged by publicly-traded bad actors looking to cash in on the coronavirus.
It’s suspected one of those companies is IBIO, a micro-cap biotechnology company that has enjoyed a bit of haymaking during the pandemic. It’s not the first time I’ve scrutinized the legitimacy of the stock because of too few financial police regulating the company’s colorful and overly-fantastic claims, as well as those of its pint-sized, publicly-traded peers.
IBIO is at it again and suspected of self-promotion that’s enough to make a carnival ringmaster blush. This past Thursday, the company’s go-to PR distribution channel, GlobeNewswire, dangled more tantalizing carrots for investors to chomp on regarding its Covid-19 vaccine platform using its plant-based FastPharming System.
My question is why isn’t CNBC, Bloomberg or any nightly national news channel taking notice? In my estimation, that’s a red flag for IBIO. The fact is, given the importance of a promising vaccine or therapy for Covid-19, there’s been absolutely no lack coverage from known legitimate news sources for biotech outfits that are making promising strides in combating the coronavirus.
Moderna’s (NASDAQ:MRNA) rise into the public’s consciousness from out of left field is proof of that. So are Novavax (NASDAQ:NVAX) and Inovio Pharmaceuticals (NASDAQ:INO). In each case, Wall Street and investors putting money where their mouths are has been significantly more impressive. There are billions in market capitalization at stake in those names, and not IBIO’s very small $175 million valuation, warning more well-informed investors aren’t interested.
Could I be wrong about iBio stock, a micro-cap awash in red ink that’s crawled out of the woodwork, but somehow will help save the world from the coronavirus? Absolutely. I’m more of a bloodhound with a nose for smelling nonsense than an investor qualified to critically analyze Covid-related science. And to be fair, there are other investors less critical and even more than a bit upbeat on IBIO’s chances.
More than a couple of my colleagues at InvestorPlace have been bullishly optimistic on IBIO. There has been speculation shares could soar 500% above current levels, or at least triple on successful vaccine trials. But again, other than fanciful press releases and a lopsided amount of well-intentioned opinion pieces from one source, I’d warn to not be left holding the bag.
IBIO Stock Daily Price Chart
Source: Charts by TradingView
The daily chart showing IBIO’s rise from the depths of obscurity and near-certain publicly-traded demise, has turned into a situation that appears promising.
Since exploding higher in late February alongside other Covid-19 biotech stocks, a substantial pullback in shares of iBio managed to successfully test and rally off the high of its key breakaway gap. But in recent days a developing uptrend has potentially taken that first turn for the worse.
In the aftermath of its most recent press release on June 4, IBIO closed lower than its opening price while forming a lower-high pattern within what had been a nicely-forming uptrend. Enthusiasm for shares appears to be seeing signs of exhaustion. It’s not the end all, say all, but it could be a first indication the stock’s days as a Covid-19 play are truly numbered.
Bottom-line, investors speculating on the company’s chances may want to strongly reconsider owning IBIO stock if today’s more questionable uptrend is really put to the test below this week’s low of $1.38.
Investment accounts under Christopher Tyler’s management do not currently own positions in securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.