Shares of Jaguar Health (NASDAQ:JAGX) are up 10% today after a regulatory filing revealed that prominent merchant banking firm Oasis Capital has a 10% stake in the biopharmaceutical company.
Headquartered in New York City, Oasis Capital says that it provides financial advisory services to public and private companies with market capitalizations of less than $250 million. On occasion, Oasis Capital will make selective investments in the companies it advises.
That Oasis Capital has taken a 10% stake in San Francisco-based Jaguar Health is viewed as a vote of confidence in the company. For those unfamiliar, Jaguar Health is developing plant-based treatments for gastrointestinal issues.
What Happened With JAGX Stock
A 13G regulatory filing revealed that Oasis Capital holds a 9.99% stake in Jaguar Health, news that has led investors to buy JAGX stock. That the merchant bank has taken a stake in Jaguar Health is seen as a big shot in the arm for the nascent biopharma company.
The regulatory filing showed that Oasis Capital owns 4.6 million shares of JAGX stock, making it one of the largest shareholders. Jaguar Health went public in 2015, issuing 3.2 million shares at $7 each. Its initial public offering (IPO) raised a total of $22 million.
Why It Matters
Before today’s big move higher, JAGX stock had been trending in one direction — downward. In the last 12 months, the company’s share price has declined 90%, including an 80% retrenchment over the past six months. Shares closed yesterday at 93 cents, putting them deep in penny stock territory.
The revelation that Oasis Capital holds a sizable stake in Jaguar Health is the best news the company has had in years, and has proven to be a catalyst for the stock price, sending it up 15% and reversing the steady and persistent slide.
What’s Next for Jaguar Health
While today’s move higher is positive for JAGX stock, it is likely to be short-lived. For Jaguar Health to truly reverse the slide in its share price, the company needs to demonstrate that its long-term strategic plan is working. That Oasis Capital holds a 10% stake in Jaguar Health is positive, but doesn’t change the fundamentals of the biopharmaceutical company.
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On the date of publication, Joel Baglole 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.