Sorrento Therapeutics (NASDAQ:SRNE) stock is falling on Monday after the company filed for bankruptcy alongside subsidiary Scintilla Pharmaceuticals.
A filing with the U.S. Securities and Exchange Commission (SEC) reveals the bankruptcy filing was made with the United States Bankruptcy Court for the Southern District of Texas. Sorrento Therapeutics is already seeking first-day approvals to continue operations.
This filing comes as the company has been engaged in arbitration before the American Arbitration Association against NantPharma. This has to do with the alleged breach of an April 21, 2015 Exclusive License Agreement.
What This Means for SRNE Stock
It makes sense that shares of SRNE stock are taking a beating on Monday in response to the bankruptcy news. Bankruptcy filings can often scare off investors that don’t believe the company can recover, which sees them selling shares. However, some companies do see their shares rise as investors jump on bankruptcy news to pump stocks up.
What’s happening today is SRNE stock experiencing strong early morning trading with investors selling shares. As of this writing, nearly 10 million shares of the company’s stock have changed hands. That’s closing in on its daily average trading volume of 11.3 million shares and the opening bell hasn’t even rung yet.
SRNE stock is down 39.9% in pre-market trading on Monday.
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On the date of publication, William White 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.