CorMedix Inc. (NYSEAMERICAN: CRMD) is having a rough day in the market today, and for good reason. The company moved forward with a one for five reverse stock split. While these moves are cosmetic, not effecting percentage ownership, they tend to lead to declines as we’re seeing today.
Nonetheless, these declines may represent an opportunity to get in on future gains at a discount. Today, we’ll talk about:
- The reverse split;
- what we’re seeing from CRMD stock as a result; and
- what we’ll be watching for haead.
CRMD Stock May Be A Great Buy After The Reverse Split
As mentioned above, CorMedix is having an overwhelmingly rough start to the trading session this morning after moving forward with a reverse stock split. The reverse split was ultimately done in an effort to improve liquidity by attracting the attention of more institutional investors.
In a statement, Khoso Baluch, CEO at CRMD, had the following to offer:
We are implementing the reverse stock split as planned so that we have flexibility to take advantage of future investment opportunities, to possibly attract more institutional interest into our stock, and given our need to have available unissued shares to reserve for past transactions. As our current cash position is expected to finance the Company into the second quarter of 2020, we believe it is a good time to move ahead.
Why This May Be Creating An Opportunity
While reverse splits are cosmetic moves, they are generally a sign of struggle, leading to declines. However, in this particular case, the reverse split may be doing nothing more than opening the door to a discounted opportunity.
The reason that I believe that this represents an opportunity has to do with the company’s flagship product candidate, Neutrolin. Neutrolin is a catheter lock solution that has produced incredibly positive results when it comes to the reduction of risk of catheter related infections.
Considering the fact that CRMD is embarking on a massive market with a CAGR of more than 5%, if approved, the Neutrolin solution could prove to be the goose that lays the golden eggs. Getting in now, while the price is low, may provide a compelling opportunity for gains in the long run.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to CorMedix, the news proved to be negative.
After all, investors aren’t fans of reverse splits. Nonetheless, the declines that have come as a result may prove to be a compelling opportunity!
Nonetheless, as is normally the case, our partners at Trade Ideas were the first to alert us to the declines. Currently (10:23), CRMD is trading at $7.65 per share after a loss of $0.65 per share or 7.83% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CRMD. In particular, we’re interested in following the story surrounding the company’s continued work to bring Neutrolin to market. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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