Clinical-stage biopharmaceutical firm Aptorum (NASDAQ:APM) is seeing its market value rise dramatically today on a merger between its wholly owned subsidiary and an artificial intelligence (AI) and automation platform. A combination of AI enthusiasm and some support from institutional investors is likely what’s helping APM stock rocket higher.
Per MarketWatch, Aptorum has agreed to merge with YOOV Group, which specializes in leveraging advanced AI techniques to optimize business operations. Specifically, the business combination is a reverse merger, which will see the biopharma’s wholly owned subsidiary integrate with YOOV.
Following the merger, shareholders of APM stock will own about 10% of the combined enterprise. Existing shareholders of YOOV Group will own the remaining 90%. In addition, Aptorum plans on separating its legacy business assets into a subsidiary called Aptorum Therapeutics.
Aptorum’s majority shareholder, Jurchen Investment, has agreed to acquire Aptorum Therapeutics, thus taking ownership of this subsidiary. As part of this multi-tiered deal, Jurchen will surrender its shares in Aptorum Group.
Investors Smile on the Rise of APM Stock
Prior to the reverse merger, APM stock was down heavily for the year. Of course, with the security now trading above $11 per share — or up by about 600% as of this writing — this paradigm has shifted dramatically. In turn, APM investors have been given a major reprieve.
The top five players holding Aptorum shares, including institutional investors and mutual funds, are as follows, per Yahoo Finance:
- Geode Capital Management: 38,552 shares.
- Fidelity Nasdaq Composite Index ETF (NASDAQ:ONEQ): 36,139 shares
- Morgan Stanley (NYSE:MS): 5,246 shares
- Fidelity Nasdaq Composite Index Fund (NASDAQ:FNCMX): 2,413 shares.
- NewEdge Advisors: 1 share.
In recent years, the broader AI space has exploded, sending up several sector-related enterprises as a result. In particular, digital intelligence integrated into the healthcare space could be a massive market, which may explain at least some of the sentiment tied to APM stock today.
According to Grand View Research, the global AI in healthcare sector reached a valuation of $22.45 billion last year. Experts project that the segment will expand at a compound annual growth rate (CAGR) of 36.4% from 2024 to 2030. At the culmination point of the forecast, the industry could print revenue of $208.2 billion.
Why It Matters
While Wednesday’s dramatic lift in APM stock is encouraging, prospective investors shouldn’t lose sight of the risks involved here. For one, it’s possible that the AI sector may be getting ahead of itself. Additionally, Aptorum has lost a substantial amount of value when stacked against its public market debut.
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On the date of publication, Josh Enomoto 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.
