One thing that penny stocks are known for are how quickly they can break out. That said, you may know them for their breakouts, but did you know that they can come down as quickly as they go up? Even though their breakouts can be profitable, sometimes they can benefit from long-term swings where they may move up on a more spread out basis. That could happen due to several factors including industry growth, insider buying, industry growth, the company progressing, or even institutional investments.
Of course with slower growth, it would probably mean that somebody would have significantly less stress entering a position and not having to worry about a stock spiking up or down quickly. Volatility typically happens within minutes or hours. That can be nerve-wracking. On top of that, lots of traders out there cannot stay in front of their computer screens every minute of the day due to other obligations. Without that availability, maybe a slow-churning mover might be better off for some.
Let me try to hammer this home… Not all penny stocks, which are known to potentially make major triple-digit moves, do so in a single day. We’ve seen time and time again that penny stocks can climb for different amounts of time including, days, weeks, and months. So, it might be time to ask yourself: what kind of penny stock might you want to get involved in? Here are a handful to put on your watch-list right now after recent news could make them attractive for traders out there.
Your No. 1 Penny Stock To Watch Closely This Friday: MDC Partners Inc.
MDC Partners Inc. (Nasdaq: MDCA) provides marketing, advertising, activation, communications, and strategic consulting solutions worldwide. It offers a range of client services, including global advertising and marketing, data analytics and insights, mobile and technology experiences, direct marketing, database and customer relationship management, business consulting, sales promotion, corporate communications, market research, corporate identity, design and branding services, social media strategy and communications, product and service innovation, and e-commerce management, as well as media buying, planning, and optimization.
Stagwell Media LP (“Stagwell”) announced today it has proposed a combination with MDC Partners, Inc. (“MDC”). A letter proposing the combination was delivered to the MDC Board of Directors this afternoon and is reprinted below. The combined entity would have generated over $2 billion in net revenue in 2019. Stagwell believes the combined company would deliver a superior value proposition to clients, enhance shareholder value, create attractive synergy opportunities and enhance the pro forma credit profile through strong free cash flow generation.
The proposal values MDC Class A subordinate voting shares (“Class A shares”) at $4.25 per share on a fully diluted basis and implies a premium of 263% to MDC’s closing price of $1.17 per share on June 24, 2020. As further described in the proposal letter, the pre-transaction holders of MDC Class A shares (without giving effect to any conversion of outstanding preference shares) would own 18.5% of the combined company on a pro forma basis.
Stagwell believes the combination of its platform with MDC presents a compelling opportunity for both Stagwell and MDC to:
- Scale our offerings and serve clients globally
- Offer best-in-class combination of insights, creative, digital and performance
- Develop products based on our unique combined tech and data assets
- Create value through operating synergies, which initial diligence suggests will have an approximate run-rate of $35 million per annum
- Provide additional growth via a differentiated M&A platform with a unique partnership model and acquisition template
Stagwell expects MDC’s Board of Directors will form a Special Committee consisting of independent directors, and that this Special Committee will retain independent financial and legal advisors to consider the proposal.
“I am excited about the potential combination of MDC Partners and Stagwell and expect the combined company will deliver meaningful shareholder value creation, accelerated growth and enhanced services to clients,” said Mark Penn, Chairman and CEO of MDC Partners and Managing Partner of the Stagwell Group.
Your No. 2 Penny Stock To Watch Closely This Friday: iBio, Inc.
iBio, Inc. (NYSE American: IBIO), a biotechnology company, provides product development and manufacturing services to clients, collaborators, and third-party customers in the United States and internationally. The company’s services cover the stages of pre-clinical development, regulatory approval, commercial product launch, and on-going commercial phase requirements. Its lead therapeutic candidate is IBIO-CFB03 for the treatment of systemic scleroderma, idiopathic pulmonary fibrosis, and other fibrotic diseases. The company is also developing vaccine candidates for third parties. It has a license agreement with the University of Natural Resources and Life Sciences, Vienna; a strategic relationship with Beijing CC-Pharming Ltd.; and collaboration agreements with AzarGen Biotechnologies (Pty) Ltd, The Texas A&M University System, and Fraunhofer Center for Molecular Biotechnology. In addition, the company offers a range of product and process development, analytical, and manufacturing services.
iBio, Inc. announced that it will be added to the Russell 2000® and Russell 3000® indexes as part of this year’s reconstitution. The additions will be made effective after the U.S. markets open on June 29, 2020.
“Being included among the companies that comprise the Russell indexes is a significant milestone for iBio, which, we believe reflects the significant progress we have made towards building shareholder value over the past few months,” said Tom Isett, Chairman and CEO of iBio. “Since December 1, 2019, we have launched our FastGlycaneering Development Service™; supported initiatives for the development of bioinks for 3D bioprinting; and expanded business collaborations with two partners for the development of a bio-better rituximab. Additionally, we recapitalized the Company and began implementing our hiring plan so as to prepare to advance IBIO-100 for the treatment of fibrotic diseases while adding more proprietary products to our portfolio. To that end, when the COVID-19 pandemic began to emerge, we quickly responded by designing two novel vaccines against SARS-CoV-2. Shortly thereafter, we demonstrated manufacturability of both platforms, signed key partnerships with providers of preclinical testing services and adjuvant technologies, and gained support from industry leaders in clinical trials data management. With preclinical immunization data for our IBIO-200 and IBIO-201 COVID-19 vaccine candidates expected in Q3-2020, we see potential additional value-creating milestones in the near term.”
FTSE Russell is a global index provider that makes available a comprehensive range of indexes used by investors to measure and analyze global markets. The Russell Indexes have been widely accepted by institutional investors for their integrity and usability. The Russell 3000® Index measures the performance of the largest 3,000 publicly-traded companies in the United States, and the Russell 2000® Index is the most common benchmark for small capitalization companies.
Your No. 3 Penny Stock To Watch Closely This Friday: Vaxart, Inc.
Vaxart, Inc. (Nasdaq: VXRT), a clinical-stage company, engages in the discovery and development of oral recombinant protein vaccines based on its proprietary oral vaccine platform. The company’s product pipeline includes tablet vaccines that are designed to protect against norovirus, seasonal influenza, and respiratory syncytial virus. It is also developing therapeutic immune-oncology vaccines for cervical cancer and dysplasia caused by human papillomavirus. Vaxart, Inc. has a research collaboration agreement with Janssen Vaccines & Prevention B.V. (Janssen) to evaluate the company’s proprietary oral vaccine platform for the Janssen universal influenza vaccine program.
Vaxart, Inc. announced that it signed a Memorandum of Understanding with Attwill Medical Solutions Sterilflow, LP (AMS) affirming the parties’ intent to establish AMS as a resource for lyophilization development and large scale manufacturing including tableting and enteric coating for Vaxart’s oral COVID-19 vaccine. AMS will be assigning dedicated resources and equipment for the scale up and commercial production of the vaccine upon entering a formal agreement.
“We believe AMS’ experience coupled with its ability to manufacture a billion or more doses per year would be a beneficial addition to our group of CDMO partners and enable the large scale manufacturing and ultimate supply of our COVID-19 vaccine for the US, Europe and other countries in need,” said Andrei Floroiu, CEO of Vaxart Inc. “We believe our oral vaccines, generated on our proven platform, have the potential to offer superior protection against airborne viruses such as SARS-CoV-2 by triggering both mucosal and systemic immunity while being administered by a room temperature-stable tablet, an enormous logistical advantage in large vaccination campaigns.”