Cheap stocks can be fun and profitable to trade, as long as you’re careful. Today I’d like to feature PharmaCyte Biotech (OTCMKTS:PMCB) as PMCB stock is a fast mover that should interest risk-tolerant investors.
Of course, low-priced stocks can fall just as quickly as they can rise. Therefore, I don’t recommend taking a huge position in PharmaCyte shares.
That being said, a moderate stake in PMCB stock could yield sizable returns. Plus, you can feel good about investing in PharmaCyte Biotech as the company battles against life-threatening diseases.
Moreover, there’s some good news for current and prospective investors in this tiny biotech firm. We’ll get to that in a moment. But first, a quick overview of the share price’s history.
A Closer Look at PMCB Stock
It’s not every day that you’ll hear about a company enacting a 1-for-1,500 stock split. Yet, this actually happened with PMCB stock.
In July, PharmaCyte Biotech announced that it would effect a 1-for-1,500 reverse share split of its of common stock. These shares would commence trading on the OTCQB Exchange at the opening of the market on July 12.
With that, the number of outstanding common stock shares would decline from around 2.4 billion to approximately 1.6 million.
So, on a split-adjusted basis, PMCB stock traded at $8.26 on July 12. Unfortunately, the stock’s value fell after that. Now the recently adjusted PharmaCyte Biotech shares trades at $3 and change.
At the same time, PharmaCyte Biotech had trailing 12-month earnings per share of -$2.45.
I’m presenting you with the bad news right up front, so you won’t start loading up on PMCB stock without knowing all of the facts first.
OK, so we got the hard part out of the way. Now, we can see if there’s any positive news to report.
A Necessary Step
Some folks might wonder why PharmaCyte chose to enact a reverse share split in the first place. That’s a valid question.
One possibility is that the company might have sought to pump up the share price, as stocks tend to appear more respectable above $1 than below it.
However, there’s another reason for the reverse split, which was stated by PharmaCyte Biotech CEO Kenneth L. Waggoner:
[W]e believe this change will make it easier for investors to trade in our stock and is a necessary step before the Company’s common stock can be listed on a national stock exchange like Nasdaq, which is our expectation.
Call it a sneaky trick or a savvy move, but effecting a reverse split to get PharmaCyte shares listed on the Nasdaq Exchange is a plan so clever that it just might work.
An Important Milestone
It’s a good thing that I regularly read InvestorPlace contributor William White’s up-to-the-minute market reports.
Otherwise, I might have missed White’s recent article on PharmaCyte Biotech.
In it, he provides an excellent summary, stating that PharmaCyte is a company that develops cellular therapies for cancer and diabetes.
For this purpose, PharmaCyte has a proprietary cellulose-based live-cell encapsulation technology, known as Cell-in-a-Box (one of my favorite product names ever).
That’s important to know, but what really captured my attention was a huge piece of news.
Specifically, PharmaCyte Biotech’s common shares escaped from the over-the-counter markets, and were upgraded to the Nasdaq Exchange.
Understandably, Waggoner called this event “an important milestone in PharmaCyte’s lifecycle.”
The CEO added that getting uplisted to the Nasdaq Exchange will provide multiple benefits for PharmaCyte Biotech.
“We believe being a Nasdaq-listed company will help elevate our public profile, expand our shareholder base, improve liquidity and enhance shareholder value,” Waggoner explained.
The Bottom Line
Did the reverse share split of PMCB stock directly lead to the Nasdaq Exchange uplisting?
It’s hard to know for sure. Nonetheless, the upgrade is definitely a positive development.
Perhaps it will provide PharmaCyte Biotech with enhanced investor interest, along with an influx of capital to help the company pursue its clinical work.
Isn’t it amazing, how unorthodox plans can work out for the best sometimes?
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On the date of publication, David Moadel 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.