Cytori Therapeutics Inc (NASDAQ: CYTX) had a relatively strong start in the pre-market after releasing news associated with a milestone payment. While the stock has given up the gains associated with the announcement, it may be gearing up for a serious run to the top. In fact, I believe that the stock may be headed for a short squeeze. Today, we’ll talk about:
- Today’s news;
- the short squeeze in the making;
- what we’re seeing from CYTX stock; and
- what we’ll be watching for ahead.
CYTX Announces The Receipt Of A Milestone Payment
As mentioned above, Cytori Therapeutics released some positive news today. According to a press release issued early this morning, the company said that it has received a milestone payment in the amount of $1 million. The payment came from Bimini Technologies after the company achieved the first $10 million in gross profit for the Puregraft product line.
CYTX entered into a Sale and Exclusive License/Supply agreement with Bimini in 2013. Under the terms of the agreement, the company sold select assets relating to the Puregraft product line to Bimini. In the future, more milestone payments may come down the road. In fact, the company is still eligible to received up to $9 million more in milestone payments, should commercialization continue in a positive way.
A Short Squeeze In The Making?
Although CYTX has fallen a bit since the announcement was made early this morning, it may be gearing up for serious gains. Recently, the stock has been trading with a seriously low float. At the same time, it has high short interest, sitting at about 11.02% after a recent rise of 38% according to ShortSqueeze.com. If the stock were to break over $0.36 for any extended period of time, shorts would likely start to be squeezed out of their positions. This could lead to tremendous gains.
What We’re Seeing From The Stock
With the positive news released this morning, Cytori went through a short spike in value. Unfortunately however, the stock is falling at the moment. As is normally the case, our partners at Trade Ideas were the first to alert us to the volatility. At the moment (11:11), CYTX is trading at $0.34 per share after a loss of $0.0031 per share or 0.90% 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 CYTX. In particular, we’re watching for any news that might lead to a short squeeze as the company is gearing up for a good one. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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