Jaguar Health Inc (NASDAQ: JAGX) is screaming for the top in the market this morning, following up on the incredible gains seen out of the stock yesterday. However, there hasn’t been news issued by the company for some time, leading many to wonder what the reason for the run is.
The catalyst seems to be a series of rumors surrounding everything from a potential acquisition to an emergency regulatory approval in Europe. Here’s what’s going on:
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- JAGX Stock Climbs on Rumors
- No Reverse Stock Split Is Exciting News
- Risks to Consider Before Buying JAGX Stock
- Final Thoughts
JAGX Stock Climbs on Rumors
As mentioned above, Jaguar Health is having a strong start to the new year, following up on tremendous gains seen yesterday with more of the same today. While the company hasn’t issued any news, it doesn’t have to. The rumor mill is running, and churning out enough excitement for Wall Street participants to jump on the bandwagon.
In fact, there are four rumors circling JAGX stock as we speak:
- SPAC Merger. The first rumor is that either today or tomorrow, the company will announce an SPAC Merger with a subsidiary of Napo Pharmaceuticals, a wholly-owned subsidiary of Jaguar Health. Of course, if an SPAC merger happens, it will be exciting news that’s likely to send the stock on the path of a rocket. That’s right; TO THE MOON!
- European Approval. There’s also a rumor that the company will receive emergency approval in Europe for Crofelemer as an option to help treat COVID-19 long haulers. Of course, an approval in the COVID-19 space has the potential to send the stock through the roof.
- Positive Data. JAGX completed its three year cancer data on December 20, 2020. Now, the rumor is that the data was overwhelmingly positive and will be released this month. There are few catalysts like positive long-term clinical data.
- Revenue. Finally, rumor has it that the company saw significant fourth quarter sales, driving tremendous revenue. According to the rumors, the data surrounding sales will also be released this month.
While this is all exciting to think about, it’s important to remember that every one of the four items above are rumors. Without any confirmation from JAGX, any move made on these rumors is a highly speculative one and could lead to significant losses.
No Reverse Stock Split Is Exciting News
One thing that’s clearly not a rumor is that the company no longer has a need to move forward with a reverse stock split. Recently, a reverse split was on the table as JAGX stock was trading under $1 per share, which could lead to it being booted from the Nasdaq.
Nonetheless, that’s a non-issue following the tremendous price appreciation seen on the stock as of late. With the price of Jaguar Health stock now well over $1 per share, there’s no threat of delisting, and therefore, no need to move forward with a reverse stock split.
Risks to Consider Before Buying JAGX Stock
If you’re investing, you’re accepting risk, it’s just part of the process. When it comes to JAGX, the most significant risks to consider are as follows:
- Jaguar Health Doesn’t Make Money. Sure JAGX generates revenue, but it’s not nearly enough to cover expenses. So, the company is consistently operating at a loss. If the company doesn’t reach profitability before the money in the bank dries up, it will likely look to capital markets as a way to raise funds, leading to dilution and declines.
- Penny Stock Risks. JAGX is a penny stock. This means that the stock is riddled with volatility, which makes timing difficult. Moreover, the company’s business model is largely unproven. As a result, an investment at this stage would be largely speculative and could result in significant losses.
- The Rumor Mill. When the rumor mill is running, valuations fly through the roof. With the rumor mill hot, if at least one of the rumors doesn’t come true, significant declines could be the result.
All in all, Jaguar Health is a compelling investment opportunity. I’m not sure if the rumor mill is right, but there is great evidence that the company’s treatment is a quality option for COVID-19 long haulers. Moreover, I’m expecting positive data to be released relatively soon.
All in all, there are several positive catalysts for investors to look forward to ahead. As such, it may be time to dive into JAGX stock.