Investors in iBio (NYSEAMERICAN:IBIO) remain curious about hedging potential bets on the shares. So, how should investors looking to make a speculative play on iBio stock judge its merits? The company has seen a rapid rise in price appreciation going from 33 cents in February, to sit at its current price of $6.41. For investors who like arithmetic, that equates to an 1,842% increase.
Pretty spectacular. And that figure also includes a massive spike of 63.93% on July 20. News regarding iBio which could explain the sudden surge is difficult to obtain. So far, suggestions are that iBio’s partnership with Beijing CC-Pharming and iBio’s promise of a single-dose vaccine are responsible.
iBio Stock: Just an Also Ran?
Markets are wondering if iBio is going to be the next Novavax (NASDAQ:NVAX), which rose from a 52-week low of $3.65, to a high of $151.20. NVAX shares currently trade below $140. Novavax has also been propelled upward by momentum and hope regarding a potential vaccine. The pattern that has emerged regarding price appreciation in stocks of vaccine candidates is simple: when non-positive news emerges, the shares of others rise. That is logical given that remaining shares still have potential to provide positive news.
Of course, any investment from the Government’s Operation Warp Speed will propel shares skyward. This is also very true of private investment which often finances biotech innovation.
Strong Previous Month
iBio announced that it was being added to the Russell 2000 and Russell 3000 indexes on June 26. And the company was first listed there on June 29. Shares got a boost on the news. Moreover, this news added momentum to the idea that iBio may produce a viable vaccine.
Just a few days prior, iBio announced that IBM is allowing them 18 months of its clinical development solution. The program is officially called the IBM Clinical Development Solution and is connected with IBM’s Watson computing system. IBM is providing use free of charge.
How iBio Can Strike it Rich
iBio’s ability to make a lot of money from a vaccine, or multiple vaccines, is as a role player. Its Bryan, TX manufacturing facility gives it the large scale ability to produce vaccines. The chances that the company directly produces a vaccine itself are near zero. Should iBio release news of contract signings to aid in the production of a successful vaccine, it will skyrocket. Investors who are looking to iBio as a spec play are keenly aware of this truth. Further, iBio’s partnership with Beijing CC Pharming also opens up potential for upward price momentum.
Get on or Steer Clear?
Investor risk profile really determines who iBio makes a wise buy decision for. Value investors likely won’t be touching iBio based on its fundamentals, and long track-record of racking up losses. But for those investors who love to gamble, iBio presents a compelling case. Markets are starting to draw comparisons between the path which Novavax charted and that of iBio. IBio shares rose massively on July 20, and markets will be paying attention.
I’ll be interested to see if there’s any news released from the company which can explain the price surge. Fundamentally, there could be a bull thesis emerging for iBio soon. And for investors who want to toss their hat in the ring for a shot at big gains, why not? There’s little rhyme or reason to some of the investor behavior during this pandemic. I can see the logic behind a gamble at this stock, I’d just do so with a reasonable stake.
As of this writing, Alex Sirois did not own shares in any of the aforementioned stocks.
