Proteostasis Therapeutics Inc (NASDAQ: PTI) is having an overwhelmingly rough trading session in the market today, and for good reason. The company was in the center spotlight of a short report released by Kerrisdale Capital, leading to fears surrounding the stock and causing it to take a dive. Today, we’ll talk about the news, what we’re seeing from the stock, and what we’ll be watching for with regard to PTI ahead.
PTI Falls Hard On Short Report
As mentioned above, Proteostasis Therapeutics is having an incredibly bad day in the market today after Kerrisdale Capital released a short report surrounding the stock. In the report, Kerrisdale Capital said that the “stock has run up on unimportant breakthrough-therapy designation, but the underlying clinical data is terrible.” The report went on to say that “the drug is bad.”
The news follows last weeks massive gains on PTI as the company announced orphan drug designation from the FDA with regard to its CF treatment. Not to mention, the company produced a smaller fourth quarter loss than investors and analysts were expecting to see. Nonetheless, Kerrisdale is not a fan of the company, and that’s weighing heavy on the stock this morning.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case the news proved to be overwhelmingly negative. After all, Kerrisdale Capital is one of the most trusted firms on Wall Street. So, when they short a stock, investors pay attention. With that said, it’s no surprise that we’re seeing a big drip in the value of Proteostasis shares today. Of course, our partners at Trade Ideas were the first to alert us to the declines. At the moment (10:05), PTI is trading at $5.96 per share after a loss of $1.03 per share (14.74%) 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 PTI. In particular, we’re interested in following the story surrounding the company’s work in CF to see if Kerrisdale is onto something here or if they’re just creating a discount for investors at the moment. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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