Seelos Therapeutics Inc (NASDAQ: SEEL) is screaming for the top in the market this morning. However, without any press releases or SEC filings, many are wondering what the reason for the run is.
It seems as though the catalyst here is an analyst initiation. Here’s what’s happening:
Skip to What You Want to Read
- Seelos Therapeutics Climbs on Analyst Initiation
- Why Investors Are So Excited About SEEL Stock
- This Could Be the Beginning of a Short Squeeze
- What Analysts Think About SEEL Stock
- Final Thoughts
Seelos Therapeutics Climbs on Analyst Initiation
As mentioned above, Seelos Therapeutics is making a run for the top in the premarket hours this morning, but with no press releases or SEC filings, many are scratching their heads trying to figure out why.
The gains are the result of an analyst initiation.
BITG analyst Robert Hazlett has initiated coverage on SEEL. According to his initiation, the stock is worth a Buy rating and expected to grow to be worth $14 over the next year.
Hazlett pointed to the fact that SLS-002, the company’s lead candidate, is expected to move into pivotal development for the treatment of patients with acute suicidal ideation and behavior with major depressive disorder.
The analyst went on to say that SEEL is expected to rapidly advance SLS-002 to meet a substantial unmet medical need. Moreover, the analyst was interested in the company’s other pipeline programs, specifically for ALS and Parkinson’s disease.
Why Investors Are So Excited About SEEL Stock
When analysts initiate coverage, investors tend to pay close attention, as we’re seeing with Seelos Therapeutics this morning.
At the end of the day, these are experts on Wall Street that have made predicting price movements their life’s work. As a result, they live and breathe the stock market.
So, when an analyst comes out with an opinion of a stock, suggesting that it’s not only headed up, but it has the potential to gain in multiples, investors tend to jump in head first, hoping to get in on the significant gains ahead.
That seems to be exactly what’s happening with SEEL stock today.
This Could Be the Beginning of a Short Squeeze
This could be a massive short squeeze in the making. After all, when heavily shorted stocks begin to tick up, those with short positions start to lose money. As a result, shorts must cover their positions by purchasing shares of the stock, leading to significant increases in volume and price.
Well, all factors are lining up for a massive short squeeze on SEEL stock.
Keep in mind, we’re talking about a stock that trades with a short volume ratio of 38%. That’s not just high short interest, that’s overwhelmingly dramatic. With the stock ticking up in the premarket hours today, shorts are likely to start covering their positions soon, and when they do, this stock could gain in multiples.
What Analysts Think About SEEL Stock
TipRanks doesn’t seem to have included the analyst initiation in their report. However, the website does mention that two other analysts are covering the stock at the moment, both of them seem to like what they see as well.
According to the website, both analysts covering the stock rate it a Buy with a price target of $6 per share. While that’s not the $14 per share we’re seeing out of BITG, it does represent the potential for more than 90% gains compared to yesterday’s closing price.
All told, Sellos Therapeutics is a stock to watch closely. At the end of the day, the company is working on developing therapeutics for multiple conditions with high unmet need, and likely moving into pivotal stages soon.
Should all go well, an FDA approval may be on the horizon, leading the stock to significant gains.
Moreover, the short squeeze potential here is hard to ignore in the short term. All in all, investors should be watching SEEL stock very closely.