Today, it’s a sea of red in the markets. However, for investors in Ontrak (NASDAQ:OTRK) and OTRK stock, it’s pretty dark red today.
Indeed, the 38% downside move in OTRK stock is certainly one of the largest moves today among small cap stocks. This AI-powered virtualized outpatient healthcare treatment company has seen a surge in investor interest throughout the pandemic. As a provider of telehealth services dealing specifically with those with untreated behavioral issues, this makes sense. The pandemic has been difficult for everyone but particularly for those with behavioral disorders. Treating these patients in a virtual setting has turned out to be a very high-growth space investors have wanted to be in.
However, since hitting a high of nearly $100 per share during this most recent meme-stock rally, OTRK stock has been on a steady decline. Indeed, this stock’s current price around $13 per share indicates a decline of more than 85% from its peak. It appears today’s significant move is a continuation of some pretty bearish momentum.
Let’s dive into what’s driving OTRK stock today.
OTRK Stock Down on SEC Filing
Yesterday, Ontrak announced via a Securities and Exchange Commission (SEC) filing that the company had lost a major contract. This contract was worth approximately $90 million, of which they have billed $42 million to date. Given the company’s market capitalization of around $240 million, this is a big loss for this small cap virtual healthcare player.
Ontrak did note in its filing that the company doesn’t believe this will materially change its outreach pool. However, investors appear to be reading between the lines today and don’t like what they see.
Additionally, via another filing, it was reported that Ontrak’s executive chairman has sold a significant chunk of stock. Any sort of significant insider selling activity like this is likely to induce an investor response. Accordingly, today it appears a confluence of factors are at play driving OTRK stock lower.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
