TRACON Pharmaceuticals Announces Reverse Stock Split
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Insights
The approval and execution of a reverse stock split by TRACON Pharmaceuticals is a strategic move that can have several implications for the company's financial health and investor perception. Typically, a reverse stock split is implemented to boost the stock's market price, which can help maintain compliance with exchange listing requirements and improve the stock's marketability. In TRACON's case, the one-for-twenty ratio significantly reduces the number of shares outstanding, potentially increasing the stock price, but without changing the company's overall market capitalization.
For investors, this move could be a signal that the company is attempting to attract more institutional investors or reduce the volatility associated with lower-priced stocks. However, it's also important to note that reverse splits can sometimes be viewed as a red flag, indicating that a company may be struggling to meet certain financial metrics naturally. Therefore, it's vital to monitor the company's future earnings reports and any strategic developments that may affect its long-term growth prospects.
Additionally, the adjustment of stock options and warrants ensures that the rights of existing stakeholders are preserved, which is a positive aspect of this corporate action. However, investors should be aware of the liquidity and market perception post-split, as these factors can influence the stock's performance in the short term.
From a market perspective, TRACON's reverse stock split could lead to a shift in the shareholder base. The move to consolidate shares and increase the stock price may deter some retail investors due to the higher per-share cost, while potentially making the stock more attractive to institutional investors who may prefer to trade in higher-priced stocks with lower volatility. This transition could lead to more stable ownership but could also reduce liquidity if retail participation declines.
Moreover, the decision to carry out a reverse stock split often comes with the intention to present the company as more financially stable and to avoid delisting risks. For TRACON, maintaining its listing on the Nasdaq Capital Market is essential for visibility and access to capital. The new CUSIP number is a standard procedural change post-reverse split and does not impact the company's valuation or operations.
It is also important to consider the company's industry position. As a biopharmaceutical firm, TRACON's pipeline and partnerships in developing targeted cancer therapeutics will continue to be a significant focus for investors. The long-term success of these endeavors will ultimately be more indicative of the company's value than the reverse stock split itself.
SAN DIEGO, April 08, 2024 (GLOBE NEWSWIRE) -- TRACON Pharmaceuticals (NASDAQ: TCON), a clinical stage biopharmaceutical company utilizing a cost-efficient, CRO-independent Product Development Platform to advance its pipeline of novel targeted cancer therapeutics and to partner with other life science companies, today announced that, following stockholder approval at the special meeting of stockholders held on September 6, 2023 of a proposal authorizing the board of directors of the Company (the Board) to amend the Company’s Amended and Restated Certificate of Incorporation to effect a reverse stock split of the Company’s outstanding common stock at a ratio in the range of one-for-five to one-for-twenty, the Company’s Board today approved a reverse stock split of the Company’s common stock at a ratio of one-for-twenty.
The effective time of the reverse stock split is 5:00 p.m. ET on April 9, 2024. Shares of the Company's common stock will begin trading on a split-adjusted basis commencing upon market open on April 10, 2024.
As a result of the reverse split, each 20 shares of the Company's issued and outstanding common stock will be automatically combined and converted into one issued and outstanding share of common stock, par value
No fractional shares of common stock will be issued as a result of the reverse stock split. Stockholders of record who would otherwise be entitled to receive a fractional share will receive one full share of post-reverse split common stock.
TRACON has chosen its transfer agent, Equiniti Trust Company, LLC (EQ), to act as exchange agent for the reverse stock split. Stockholders owning shares via a bank, broker or other nominee will have their positions automatically adjusted to reflect the reverse stock split and will not be required to take further action in connection with the reverse stock split, subject to brokers’ particular processes.
About TRACON
TRACON is a clinical-stage biopharmaceutical company utilizing a cost-efficient, CRO-independent, product development platform to advance its pipeline of novel targeted cancer therapeutics and to partner with other life science companies. The Company’s clinical-stage pipeline includes: Envafolimab, a PD-L1 single-domain antibody given by rapid subcutaneous injection that is being studied in the pivotal ENVASARC trial for sarcoma; YH001, a potential best-in-class CTLA-4 antibody in Phase 1 development; and TRC102, a Phase 2 small molecule drug candidate for the treatment of lung cancer. TRACON is actively seeking additional corporate partnerships through a profit-share or revenue-share partnership, or through franchising TRACON’s product development platform. TRACON believes it can serve as a solution for companies without clinical and commercial capabilities in the United States or who wish to become CRO-independent. To learn more about TRACON and its product pipeline, visit TRACON’s website at www.traconpharma.com.
Forward-Looking Statements
Statements made in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Such statements include, but are not limited to, statements regarding the expected commencement of trading of TRACON’s post-split common stock. Such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements. Such risks are included under the caption “Risk Factors” in TRACON’s Annual Report on Form 10-K for the year ended December 31, 2023 and TRACON’s other filings subsequently made with the Securities and Exchange Commission. All forward-looking statements contained in this press release speak only as of the date on which they were made and are based on management’s assumptions and estimates as of such date. TRACON does not undertake any obligation to publicly update any forward-looking statements, whether as a result of the receipt of new information, the occurrence of future events or otherwise except as required by law.
| Company Contact: | Investor Contact: |
| Charles Theuer | Brian Ritchie |
| Chief Executive Officer | LifeSci Advisors LLC |
| (858) 550-0780 | (212) 915-2578 |
| ctheuer@traconpharma.com | britchie@lifesciadvisors.com |
FAQ
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