Why Is Sunshine Biopharma (SBFM) Stock Down 30% Today?

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Today, reports of an updated offering are pushing Sunshine Biopharma (NASDAQ:SBFM) down. However, there are additional factors at play. Days ago, shares of the company rose when it reported positive results for its mRNA cancer treatment molecules. Now, SBFM stock is falling as investors navigate a confusing scenario.

a scientist with protective equipment and microscope in a lab
Source: luchschenF / Shutterstock.com

This complicated story is worth examining in context.

Today’s performance closes out a complicated week for the microcap pharmaceutical producer. Sunshine’s earlier rally — spurred by the positive cancer treatment results — sent it surging. This morning, SBFM stock also continued to rise 21% in pre-market trading. However, things have been turbulent at best since then. As of this writing, the stock is down more than 30% for the day. While this is an improvement over earlier declines, it’s still a significant decrease.

What’s Happening with SBFM Stock?

As I mentioned before, this story is complicated, starting almost one month ago. On March 10, SBFM submitted a filing with the U.S. Securities and Exchange Commission (SEC) that it would be issuing 3.6 million shares at a price of $2.22 in a private placement, expected to raise roughly $8 million. The news caused SBFM stock to fall. Share prices remained mostly stagnant throughout the month with slight declines. Then the company announced an amended S3 filing on March 30.

This morning, as shares fell, the company posted on Twitter (NYSE:TWTR) to address any confusion among investors.

Matters like these can certainly be confusing. However, this story is a good reminder of the importance of reading the fine print when it comes to filing news. All that happened today was that Sunshine Biopharma confirmed its S3 resale went into effect — not a new filing or resale announcement.

While there was no real reason for investors to panic today, the performance we’ve seen from SBFM stock still raises some questions regarding its future. The company’s recent cancer treatment success pushed it out of penny stock territory. For the past one month, shares are in the green by more than 330%.

Why It Matters

When a stock rises overnight by such a high amount, its gains inevitably stabilize. That’s likely what we’re seeing from SBFM stock. It’s easy for a pharmaceutical company to rise quickly on positive results. However, shares are often just as quick to fall as the momentum subsides. This is especially true for small caps that weren’t previously on Wall Street’s radar.

Today’s performance indicates that SBFM stock likely isn’t the play some investors might have hoped. If it was truly stable, this news wouldn’t have forced it down by so much. Sunshine is also likely not a meme stock favorite, as investor confidence has clearly been shaken. All told, this seems like a flash-in-the-pan spike from a company about to fall back below the $5 mark.

On the date of publication, Samuel O’Brient did not hold  (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.


Article printed from InvestorPlace Media, https://investorplace.com/2022/04/why-is-sunshine-biopharma-sbfm-stock-down-30-today/.

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