Netlist, Inc. (NASDAQ: NLST) is having an incredibly strong start to the trading session this morning. However, if you go digging, you’ll quickly find that the company has not produced any new press releases in the past 5 days. So, what’s the deal? Well, the stock is recovering from recent and massive declines associated with a public offering. Today, we’ll talk about:
- Why the stock is up and whether it’s worth your time;
- what we’re seeing from NLST and;
- what we’ll be watching for ahead.
NLST Is Flying!
As mentioned above, while the company hasn’t released any news today, Netlist is flying in the market. The gains are largely associated with recent developments we’ve seen from the company.
First and foremost, the stock recently climbed dramatically after announcing a favorable claim construction order in the patent infringement case against SK hynix. These types of cases in the memory industry tend to be massive and could lead to very large payouts. With a claim construction order in favor of NLST, it now has the upper hand in the infringement case, and could be receiving one of these large settlements or judgements relatively soon. With the potential for this to take place, investors have been excited.
However, excitement was tappered down a bit last week when the company announced a $10 million public offering. Essentially, while the claim construction order was in its favor, the company’s cash on hand simply didn’t cut it and may not have been enough to last it through the infringement case. So, the company was forced to raise funds and did so with a highly dilutive transaction. Of course, that news upset investors and NLST tanked as a result.
Nonetheless, with the offering behind us, investors seem to be shifting their focus back to the patent infringement case and the potential the case has to drive value for the company. So, after dramatic declines, the stock is making its way up as investors shift their focus.
What We’re Seeing From The Stock
With so much going on surrounding Netlist, it comes as no surprise that we’re seeing big movements in the value fo the stock. As is normally the case, our partner at Trade Ideas were the first to alert us to the gains. Currently (9:50), NLST is trading at $0.42 per share after a gain of $0.061 per share or 17.03% 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 NLST. In particular, we’re interested in following the story surrounding the company’s patent infringement case agains SK hynix as the case could yield incredible value for shareholders. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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