One of the biggest moves that we’re seeing early on in the trading session today is coming out of Reshape Lifesciences Inc (NASDAQ: RSLS). While the compnay hasn’t issued any press releases or filed anything with the SEC, there’s a good reason for the gains. Today, we’ll talk about why the stock is running for the top, what we’re seeing form RSLS and what we’ll be watching for ahead.
Here’s Why RSLS Is Running For The Top
Ultimately, the gains in the value of Reshape Lifesciences have to do with a mix of recent news and coming news. Here’s what’s going on:
Recent News – Recently, RSLS has released a bit of news. In fact, just last week, the company announced a 1-for-140 reverse stock split. In general, reverse splits are viewed as negative. However, in this particular case, the stock showed a positive reaction. There are two possible reasons for this:
- The reverse stock split brought the value of the stock well over $1 per share, meeting the minimum bid-price requirement for the stock to maintain its listing on the NASDAQ.
- More positive news was released with regard to the ReShape Balloon.
In a separate announcement, made on the same day as the reverse split announcement, RSLS announced a VA contract surrounding its Balloon product. The contract was signed with Academy Medical and gives VA surgeons the ability to purchase the company’s Balloon product.
Yesterday, even more positive news was released when the company announced that it has completed an investigator meeting with regard to the trial in the EU that is designed to support CE Marking for the ReShape Vest. The meeting was designed to further prepare investigators for the upcoming clinical trial of the product.
Coming News – While recent news has been positive, these aren’t the only stories exciting invetors. In fact, there’s a catalyst on the horizons. Tomorrow, after the closing bell, the company will report its financial results for the most recent quarter. However, be prepared, this could go bad. After all, don’t forget that after a run in value last week, RSLS fell after intragastric balloon competitor, Apollo Endosurgery, recently reported their Q3 results, missing expectations.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of ReShape Lifesciences, the news has been positive as of late. This, combined with the fact that there’s a catalyst around the corner is leading to excitement and sending the stock on a run for the top. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:57), RSLS is trading at $2.15 per share after a gain of $0.36 per share or 20.06% so far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to watch RSLS incredibly closely. There’s quite a bit to watch here. First and foremost, we’re interested in seeing the company’s earnings results and hoping that they do better than Apollo Endosurgery. We’re also interested in tracking sales in the VA following the recent contract and the company’s work with regard to the development of the Vest product. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!