Investors in NewGenIvf (NASDAQ:NIVF) certainly have plenty to cheer today. Shares of NIVF stock were up over 60% in early afternoon trading and more than 100% at one point during today’s session.
This move appears to be a direct result of the company signing a non-binding term sheet for a potential reverse merger with a European company in the wellness space. NewGenIvf is proposing a deal in which the company will undertake a reverse merger with European Wellness Investment Holdings Limited, eventually taking on the ticker EWIHL.
This deal aims to improve the company’s operating position and unlock potential synergies in the wellness space. Here’s what investors may want to know about the prospective transaction and what it may mean for this small-cap stock.
NIVF Stock Surges on Potential Reverse Merger
As a leader in fertility services for individuals in Asia looking to conceive, NewGenIvf is certainly an interesting company for investors to look at. With birth rates down and many countries in Asia looking to increase their populations (or at least stop their populations from declining), such services may be in higher demand over the long term. This proposed deal would bring the company’s Asia-focused business to global markets and could expand the reach of NewGen significantly moving forward.
Now, NIVF stock is still a micro-cap play, with a market capitalization of just $13 million after today’s move. This merger likely represents a meaningful step toward true commercialization for the company, but it’s still among the smaller-cap companies that could see volatility ahead of this merger.
Today’s move is certainly welcome for existing investors, but it’s also true that NIVF stock has sunk significantly off of today’s high. Thus, it’s unclear how much credence investors are giving to this deal actually going through.
This deal is expected to go through at around $5 per share, but with shares of NIVF stock trading at just above $1 per share after the announcement, there’s plenty of uncertainty the market continues to price in. I think this stock is a “show me” story at present, but it’s certainly one investors are putting on their watch lists today on this announcement.
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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.
