Lixte Biotechnology Holdings Inc (NASDAQ: LIXT) is screaming for the top in the market this morning, with premarket gains of around 100%. However, the company hasn’t issued any news. So, what’s the deal?
It seems as though retail investors are banding behind this ultra-low float stock, lifting demand and therefore, lifting its price. Here’s what’s going on:
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- Retail Investors Band Behind Lixte Biotechnology Stock
- What is LIXT?
- Risks to Consider Before Buying LIXT Stock
- Final Thoughts
Retail Investors Band Behind Lixte Biotechnology Stock
As mentioned above, Lixte Biotechnology stock is flying in the premarket hours this morning, but the company hasn’t issued any news. Nonetheless, it seems as though the retail crowd on Wall Street is banding behind the stock.
Recently, we’ve seen what retail investors can do when they get together and purchase shares, causing short squeezes in stocks like GameStop, Express, and several others.
While there’s not much by way of short interest when it comes to LIXT, meaning that this is not a short squeeze, there is quite a bit of discussion about the stock on Wall Street Bets, StockTwits, and Twitter, suggesting that the retail crowd is interested.
Moreover, there’s potential for even more dramatic gains here.
At the moment, LIXT trades with a public float of just 4.5 million shares. That’s an incredibly low share supply. As the law of supply and demand tells us, when supplies of anything are very low and a flood of demand comes in, the price must increase.
With retail investors diving into LIXT, and such a tiny public float, it only makes sense that the stock is experiencing dramatic gains this morning.
What is LIXT?
Lixte Biotechnology Holdings is a clinical-stage biotechnology company. In particular, the company is focused on the development of treatments for patients with cancer.
The flagship product at LIXT is known as LB-100, which the company believes has serious potential as an anti-cancer agent, whether used alone or in combination with other therapies.
At the moment, there are four clinical programs surrounding the use of the treatment as a potential option in some of the world’s most pressing cancers. Moreover, the drug is the topic of a preclinical program for yet another oncology indication.
Risks to Consider Before Buying LIXT Stock
If you’re thinking about diving into Lixte Biotechnology Holdings stock, you’ll be wise to consider the risks. After all, there’s no such thing as a risk-free investment. In terms of LIXT, the most significant risks are as follows:
- Capital Risk. Lixte Biotechnology Holdings is a clinical-stage company. That means the company doesn’t generate revenue from the sale of its therapies and must survive on the money it has in the bank. Should these funds not be enough, the company will likely look to public markets as a way to raise capital, leading to the dilution of existing shareholder value and potentially significant declines.
- Clinical & Regulatory Risks. As a clinical-stage biotechnology company, it’s very important for LIXT and its investors that not only the clinical trials the company is working through go well, but that regulatory authorities hold the same view. Should this not be the case, the company won’t be able to bring its products to market.
- Volatility. Finally, LIXT is a penny stock. As a result, the stock is subject to extreme levels of volatility, which makes timing entrances and exits difficult and may open the door to significant short-term losses.
Sure, there are risks to consider here, but there are also plenty of good reasons investors are banding behind Lixte Biotechnology Holdings. The company is working to develop therapeutic options for patients with some of the most dire of prognoses.
Moreover, with a limited amount of shares available on the market, the potential for this stock to fly much higher is real. All in all, LIXT stock is one to watch closely.