Delcath Systems (DCTH) Stock: Investors Are Enjoying The Short Sale Restriction


Delcath Systems, Inc. (NASDAQ: DCTH) is having an overwhelmingly strong time in the pre-market hours this morning, and for good reason. A short-sale circuit breaker was triggered on Friday and remains active on the stock. As a result, investors are excitedly pushing the stock toward the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (9:05), DCTH is trading at $0.10 per share after a gain of $0.05 per share (93.55%) thus far today.

DCTH Investors Enjoy The Short Sale Circuit Breaker

Today, Delcath Systems is enjoying a rule that the SEC adopted back in 2010. The rule, known as Rule 201 or the Alternative Uptick Rule, is a short-related circuit breaker. When this circuit breaker is triggered (as it was on Friday), the stock cannot be sold short. At the moment, DCTH is enjoying the Alternative Uptick Rule, as the stock simply can’t be sold short at the moment.

There Are A Few Good Reasons To Be A Bull Here

While the short-sale circuit breaker is a fun time for DCTH investors, it’s only temporary. However, there are good reasons to be a bull on this stock for the long haul. First and foremost, later this month, the company will be releasing Phase 2 clinical data surrounding the combination of Melphalan with the company’s Hepatic Delivery System as a treatment for both liver cancer and bile duct cancer.

On top of that, the company is also working on a Phase 3 clinical trial. In this trial, DCTH is investigating Melphalan Hydrochloride for injection for use with the Delcath Hepatic System in patients with Hepatic Dominant Ocular Melanoma. However, we haven’t even gotten to the best part.

At the moment, Delcath Systems is doing some incredible work in the oncology space. With multiple mid- and late-stage clinical trials and a strong IP portfolio, there’s tons of value here. However, the market cap on the company is still relatively small. As a result, DCTH may be the perfect takeover target for larger players in the oncology space. That’s especially true if the clinical results prove to be as positive as investors are expecting. So, not only is there a value proposition in the assets the company owns, but also in the concept that a takeover may be coming down the line.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will be keeping a close eye on DCTH. In particular, we’re interested in following the clinical data and ongoing trials surrounding the company’s work in the oncology space. We’re also interested to see if any takeover interest starts hitting the company, as there’s a good reason for it. We’ll continue to follow the story closely and bring the news to you as it breaks!

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