OCGN Stock: Ocugen Squeezes the Shorts

Ocugen Inc (NASDAQ: OCGN) is screaming for the top in the market this morning, squeezing the shorts out of their positions after announcing news surrounding its 2020 Annual Meeting of Stockholders. Here’s what’s going on:

Skip to What You Want to Read

Ocugen Announces the Commencement of Its Annual Meeting of Stockholders

In the press release, Ocugen announced that it will convene its 2020 Annual Meeting of Stockholders today, December 23, 2020, at 11:00 AM Eastern Time. 

Moreover, the company expects to adjourn the meeting with respect to item 2, which is a proposal to amend the Company’s Sixth Amended and Restated Certificate of incorporation to increase the number of authorized shares of common stock. 

OCGN went on to explain that it is planning the adjournment to provide its stockholders additional time to vote on the proposal. The company said that the Annual Meeting will resume with respect to Item 2 on January 13, 2021. 

Moreover, the company will amend and restate Item 2 of the Definitive Proxy Statement. Instead of looking to increase its authorized shares to 500 million, the company seeks to increase its authorized shares to 400 million. 

Why OCGN Stock Is Screaming for the Top

Investors are excited, but why?

Well, there are a couple of factors at play here. First and foremost, investors are looking forward to the updates provided in the Annual Meeting of Stockholders. Any positive update has the potential to act as a compelling catalyst. 

Moreover, the fact that the company is amending Item 2 to request an increase in authorized shares to 400 million, rather than 500 million is great for investors as well. After all, authorized shares give the company the ability to issue new shares in an attempt to raise capital. With the amendment, if Item 2 passes the vote by shareholders, the company will increase its authorized share count, but by 100 million less shares than originally requested, limiting the company’s ability to dilute value for existing shareholders in the future. 

Moreover, OCGN stock trades with an ultra-tiny float and relatively high short interest. As such, when the stock started to head up, short sellers began abandoning their positions, racing to cover and sending the stock screaming for the top. 

What Analysts Think About OCGN Stock 

According to TipRanks, there are currently four analysts covering Ocugen stock. Of the four analysts covering the stock, three rate it a Buy while one rates the stock a hold. 

In terms of price targets, the high target is $1.00 with the low target being $0.70 and the median coming in at $0.90. 

It’s important to keep in mind that many analysts work for firms that invest in the stocks they cover, so their opinions are often skewed. As such, it’s never a good idea to blindly follow the opinions of analysts. Nonetheless, it is wise to use their opinions as a source of validation for your own. 

Risks to Consider Before Buying OCGN Stock

If you’re going to buy a stock, and I mean any stock, you’re going to have to accept risk. Ultimately, there’s risk in any investment you make. When it comes to OCGN stock, investors should consider the following risks:

  • Capital Risk. Ocugen is a clinical-stage biotechnology company. That means the company doesn’t earn revenue through the sale of its products. As such, it must survive with the money it has in the bank. If it’s not able to do so, it will likely raise funds through the sale of newly issued shares, which will dilute value for existing shareholders. 
  • Clinical Risk. As a clinical-stage biotechnology company, Ocugen must perform well in the clinic. Should a clinical trial fail, significant declines will be the likely result. 
  • Regulatory Risk. Even if clinical trials go well, the company must also appease regulatory authorities in order to sell its products. Should these authorities find holes in the data and reject commercialization applications significant losses will be the result. 
  • Penny Stock Risk. As a penny stock, OCGN comes with the additional risks generally seen in stocks in this category. These risks include a relatively unproven business model, high levels of volatility, and lack of profitability, all of which can result in losses.

Final Thoughts

While there are risks involved in buying OCGN stock, there’s always risk involved in investing. Ultimately, the company is working on compelling science in order to find solutions to diseases that cause blindness, and should it be successful, it will prove to be a high value opportunity. 

All in all, with today’s positive news and the dramatic run in the value of the stock, OCGN is becoming hard to ignore.