Seneca Biopharma Inc (NASDAQ: SNCA) is flying in the premarket hours this morning as excited investors dive in. So, what’s all the excitement about?
A special meeting of investors is taking place soon and could lead to a merger.
Seneca Biopharma Investors to Vote on Merger
Seneca Biopharma is working to close a merger with Leading BioSciences. However, to do so, the company must receive shareholder approval on multiple proposals, including:
- The Merger Itself. In order for the merger to take place, investors must vote in favor of the transaction.
- Reverse Split. The company also will need to bring its per share price up and intends to do so through a reverse split.
- Share Issuance. Finally, for the merger to take place, the company must issue new shares, yet another factor that investors will need to vote on.
Those votes are coming soon too.
In fact, the votes will take place during a Special Meeting of Stockholders on March 24, 2020, which is just days away.
To make things more exciting, the company hired an independent proxy advisory firm known as Institutional Shareholder Services, or simply ISS. Late last week, Seneca Biopharm announced that ISS recommended that shareholders vote in support of the proposed merger and other moves that will be made in order to make the merger happen.
In a statement, Ken Carter, Chairman at Seneca Biopharma, had the following to offer:
We are very pleased that ISS supports the Seneca board’s recommendation that stockholders vote “FOR” the proposals in support of the merger with LBS. We believe and are confident that this transaction is the best strategic option for Seneca and its stockholders.
These Gains Could Just Be Beginning
The gains that we’re seeing at the moment may just be the tip of the iceberg. First and foremost, if the merger goes through, it will be overwhelmingly exciting news and will likely send the stock on a run for the top. However, technical data also suggests there’s plenty more room for gains here.
At the moment, Seneca Biopharma stock trades with short interest of around 21% and a public float of just 17 million shares. Considering these stats, the uptick in the value of the stock could just be beginning. After all, a short squeeze would lead to tremendous buying and with such heavy short volume and a low public float, this buying would send the stock through the roof.
The bottom line here is simple. There are exciting times ahead for Seneca Biopharma and its investors. Should the vote go well on March 24, a merger will be on the horizon, giving investors plenty to look forward to and likely squeezing the shorts out of their positions, making SNCA stock one to watch closely.