Delcath Systems, Inc. (NASDAQ: DCTH) is likely to have a relatively strong day in the market today. That’s because there is a short sale restriction currently active on the stock. Before we get into the details here, a special thanks goes out to our partners at Trade Ideas for being the first to alert us to the news. Currently (9:13), DCTH is trading at $0.11 per share after a loss of 0.99% thus far today.
DCTH Short Sale Restriction In Place
As mentioned above, Delcath Systems has an opportunity to have a strong day in the market today as the result of a short sale restriction on the stock. The short sale restriction is part of amendments to Regulation SHO that were adopted on November 10, 2010 by the United States SEC. One of these amendments was Rule 201, also known as the Alternative Uptick Rule. Under this rule, when a short sale-related circuit breaker is triggered, it will restrict prices at which securities can be sold.
At the moment DCTH is in the midst of a short-sale circuit breaker, meaning that the stock will not be able to be sold short throughout the trading session. This is overwhelmingly strong news for the bulls, as shorts have held the stock down for some time now. So, today gives the bulls an opportunity to fight back.
News On The Horizon
For those interested in DCTH, it’s important that you know that news is on the horizon. You see, for some time now, the company has been working to get investors to approve a reverse stock split. In doing so, the company would have access to $13.7 million in much needed funding. On top of that, the company also recently released news informing investors that if a reverse split is indeed approved, it will be able to wipe out a big chunk of convertible notes, making it more appealing.
However, looking at various online message boards and social media outlets, Delcath Systems investors seem to be sticking to their guns. Many of them are not only voting no themselves, but taking screenshots of the process and pleading for other investors interested in the stock to do the same.
Nonetheless, the results of the vote will come relatively soon. According to the most recent extension filed surrounding the DCTH RS story, the deadline for the reverse split is September 7th, just 7 days away! So, big news will be coming, and it’s going to happen soon.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to watch DCTH incredibly closely. In particular, while we believe that the vote surrounding the reverse split will be a no vote, anything can happen in the market. As such, we’re interested in following the potential reverse split and the steps the company takes following the vote, regardless of whether the results are a yes or a no. We’ll continue to follow the story closely and bring the news to you as it breaks!
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