In March of 2020, COVID-19 caused the biggest single-day stock market plunge of all time, in an event that will go down in history as Black Monday II.
Since that time, the pandemic has been wreaking havoc across the globe, causing citizens worldwide to consider the benefits of medical technology, and investors rushing into companies that appeared ready to capitalize.
Biotechnology companies that happened to be involved in areas related to COVID-19 research, treatment, or vaccination have been on a run that outpaces the rest of the (already impressive) market.
It just so happens that one of our biotech picks from May is up 260% (as at market close, January 4th , 2021) and we believe we could be looking at another biotech company that is going down a similar path in many ways.
After the crash, we put together a Pandemic Portfolio, which was comprised of specific companies that we believed were specifically positioned to benefit from the ‘new normal”. On May 15th, we added ImmunoPrecise Antibodies ($IPA) to the list as our 10th stock to watch.
The company was a huge hit. We first brought it up to our audience when the market cap was a little over $68M and the price was less than a dollar per share. After taking part in a huge run, performing a 1:5 stock consolidation, and being listed on the NASDAQ, this company has completely transformed.
There are obvious factors that have helped boost ImmunoPrecise up to this point such as: topicality, consistent record quarterly revenues, a pre-existing relationship with many big pharma companies, and more.
There is, however, one aspect of IPA’s run that we’ve found extremely interesting, which is seemingly becoming a trend for biotech companies…
How a Listing on the NASDAQ Affects Investors
On September 9th, 2020, ImmunoPrecise finished trading at $8.90 CAD (post-consolidated adjustment). The next day, IPA announced its intention to cross-list on the NASDAQ and ended the day 5% up… not a huge change.
However, when ImmunoPrecise was approved for a listing to the NASDAQ on December 23rd, 2020, the company saw a massive spike and shot up over 15% to its current level (as of market close, January 4th, 2021), as tech-savvy investors got a chance to invest in the company.
With a history as the first electronic exchange and the carrier of tech giants such as Apple, Facebook, and Amazon, the NASDAQ has a reputation for being the most technologically advanced stock exchange in the U.S. and has become particularly well known as the home of many tech focused companies.
ImmunoPrecise isn’t the first to undergo a transformation after being added to the exchange.
David Elsley, co-founder, President and CEO of Cardiol Therapeutics (Canada: CRDL) (U.S.: CRTPF), noted that other companies – most notably, GW Pharmaceuticals ($GWPH), – had their “true re-evaluation occur” once they were added to the NASDAQ and put in front of investors who truly understood the value propositions.
There is another interesting angle to playing a NASDAQ up-listing, and that is the access it provides to the notorious trading platform, Robinhood, with its hordes of hungry traders.
As we’ve said in previous articles, we do not want to chase companies that have already had their big break. With IPA, we believe that it may be too late to experience any large upside and are currently seeing investors taking profits and cooling off the chart.
As with any large run that has already taken place, we tell all investors to…
Replace FOMO with Research
If you want to start a company, you listen to the words of successful entrepreneurs and CEOs. If you want to become a professional athlete, you watch performance videos and get tips from the stars. If you want to find a company that is set up for success, look at the game-changing catalysts for other companies in its industry and see how it compares.
Cardiol Therapeutics is a company that we’re seeing expertly line up its catalysts, then chase them down with relentless determination. Cardiol is currently building out a revenue plan in Canada, moving ahead with a COVID-19 treatment trial, and is pursuing a listing on the NASDAQ in 2021.
We truly believe that this is a ground-floor opportunity and have done extensive research into it. You can read our research on the company here, then start into your own research journey.
Disclaimer: Cardiol Therapeutics. is a communications client of Edge Investments, and we own shares in the company.