In today’s turbulent market, what was once green is now red for many companies across all major indices. That said, among today’s bigger losers is Silo Pharma (NASDAQ:SILO), as this early-stage biotech stock is set for its Nasdaq initial public offering ( ). SILO stock which, until today, was traded on the over-the-counter exchange is down roughly 20% as investors attempt to price out this company’s future prospects.
Silo announced the pricing of its IPO today, which is expected to bring in $5 million in gross proceeds. An underwritten public offering of 1,000,000 shares at $5 apiece was put forward to the market. These gross proceeds are expected to be used to push forward the development of the company’s psychedelic therapeutics, aimed at patients suffering from ailments such as PTSD, Alzheimer’s, and other neurological disorders. The IPO is expected to close “on or about” Sept. 29.
Let’s dive into whether investors can expect a hot debut from this intriguing company.
What Can Investors Expect From the SILO Stock IPO?
Based on Silo’s over-the-counter existing listing, the company appears to have a market capitalization of around $500 million. Thus, this isn’t some small-cap player in a fringe area of the market. Psychedelics remain a hot growth area many long-term investors are honing in on. Accordingly, I’m expecting some significant volatility following today’s debut on the Nasdaq.
Now, whether this volatility is to the upside or not remains to be seen. Today’s price action for SILO stock appears to be bearish. Whether that’s simply a result of macro forces or this capital raise, will be determined in short order.
For now, SILO stock is one I think momentum investors will want to keep on the radar. Those taking a long-term view of this sector may certainly want to give this stock a look. Personally, psychedelic-related pharma companies are among the growth stocks I think could be compelling at reasonable valuations. It’s the valuation piece that’s hard to do for these often unprofitable companies.
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.