Redomicile and reverse split
I’m nobody, and I don’t pretend to be any smarter or more insightful than anyone‘ anywhere. That being said, my (humble) opinion of what is likely to happen upon the completion of the process is contrary to most on this message board.
It has been just about 2 months since the announcement and the trend has been down. Also, it had very little participation in the past month’s rally. Volume has been trending downward since April, with 5 of the last 20 trading days showing volume below 200,000. This indicates, to me, a lack of sellers, and even fewer buyers.
RCEL is a retail penny stock with virtually no institutional ownership. By restructuring its capital , the new entity will be the same company but a very different stock. With a new listing on NASDAQ it becomes much more than a non-domestic biotech with a bloated share count. It will meet all criteria for investment by the vast majority of Biotech ETFs and biotech and health care mutual funds. A look into any of these vehicles components and you find hundreds of companies of varying market caps and at different stages of development. I believe there will be a demand for the new shares that do not exist with the present structure.
I further believe that, in a very short time Avita will garner analyst coverage and based on their story and potential , I believe, ratings will be favorable. I also think the higher share price gives the company a higher profile, which will make it easier for a bid pharma to say yes to a collaboration in the cosmetic area. If this were to come about, the value of the company’s IP would increase dramatically.
With those thoughts in mind, I have initiated a position in RCEL JAN21 calls. I feel confident that prior to expiration the share price in move up enough to cover the spread, premium and commissions.
My thoughts only, but a scenario that could be a possibility.
