When Penny Stocks Breakout, They Breakout Big
When penny stocks swing for the fences, sometimes even the staunchest of opponents can’t help but be impressed. For those of you just signing on today, shares of Greenwich LifeSciences Inc. (GLSI Stock Report) went absolutely insane on Wednesday. To think that just one month ago, to date, it was considered a penny stock is almost unfathomable. But here we are, GLSI stock reached post-lunchtime highs of over $104. It also experienced its most active trading day since its IPO.
What Happened With GLSI Stock?
We won’t get into the whole history lesson of IPOs and the grassroots of Greenwich LifeSciences. But I’ll catch you up to speed if this is the first time you’re seeing GLSI. Back in September, the company had its initial public offering. It was indicated to begin trading at $4.99 but ended up kicking things off at $5.75 on September 25th. To be honest, it was a very slow bleed to what was its low of 2020, $3.26. As far as those “getting in early”, the total volume up to that point was only 836,900 shares; yes, that’s a total figure.
Where most traders seek out penny stocks that trade at least a few hundred thousand shares per day, GLSI stock had traded a total sum of less than 840k shares between September’s IPO and the November 4th low. It would remain a lightly traded stock for the remaining weeks leading up to this week. Furthermore, share prices never climbed higher than $5.75; the opening price on the date of its IPO. So if you feel like you “missed out” and “should’ve been looking for” the stock sooner, I wouldn’t get too hung up.
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As with most life sciences companies, the road to a proven treatment is long. It usually costs a lot of money, and in many cases ends up coming to a roadblock at some point. Especially when you’re talking about a stock that barely trades and at such a low price, I’m sure many who looked at the company from its IPO were expecting “just another biotech stock“. But with an offering of 1.26 million shares for only $7.25 million raised, something seemed a bit unique about this IPO. It was a stark difference from some of the mega tech IPO’s we’ve seen this year. This includes DoorDash (DASH Stock Report) today. Just for reference, DoorDash raised billions even before its IPO. Reports also cite it raised at least $3 billion at its initial $32 billion valuation.
What Does Greenwich LifeSciences Do?
This is where investors are likely to look deeper to find out what Greenwich does and if its model is actually sustainable. If there’s one thing we’ve learned from the Kodaks (KODK Stock Report) and Urban Ones (UONE Stock Report) of the market, parabolic moves can end in tears if you’re not able to manage risk.
In the case of Greenwich, the company develops GP2. This is an immunotherapy that looks to prevent breast cancer recurrences in patients who previously underwent surgery. In the pool of breast cancer treatment stocks, there are numerous companies developing potential treatment candidates. Earlier this quarter, Greenwich finished manufacturing of its GP2 ingredient for the planned Phase 3 clinical trials. The company teamed up with Baylor College of Medicine for the trial, which acted as the lead clinical site in this case.
This week a poster presentation of a 5-year data set for GP2 in its Phase 2b trial showed something worth a second look. In fact, according to data presented, 0% recurrence of breast cancer among the cohort.
“The poster presented at the SABCS is important because the Kaplan Meier survival curves and demographic data further validate our promising HER2 3+ Phase IIb data and support our plan to commence a Phase III trial in 2021.
Snehal Patel, CEO of Greenwich LifeSciences
Due to the high recurrence of breast cancer (1 in 8) these findings were pivotal. According to Greenwich, roughly half of women with recurring breast cancer don’t respond to Herceptin or Kadcyla, two standard treatments, resulting in metastatic breast cancer and a poor prognosis. Approximately 80-85% of metastatic breast cancer patients do not survive.
“By addressing this unmet need, GP2 may reach a potential market exceeding $5 billion,” Patel continued.
What Is The GLSI Stock Forecast Moving Forward?
A move like this is considered a unicorn among day trades. GLSI stock has more than 10x’d investors who saw the stock just a month ago. On November 9th, shares were trading as low as $3.75 at one point. That means a move from then to December 9th, post-lunch highs of $130 equate to a move of 3,367%. Now, realistically, could that be the case for most traders? Well, less than 4,000 shares traded on November 9th so chances are slim. But even those looking at GLSI stock on Wednesday, shares jumped more than 390% from the opening price of $16.07.
As far as the GLSI stock forecast is concerned, it’s important to understand the magnitude of this move in just a day. You’ve also got to remember these data are from a Phase 2b portion of the trial. Now Greenwich goes on to Phase 3. But, obviously, the fact that the data came from a 5-year study, this was a long road already for the company. The big question mark is now on the future of this next phase. Will similar results be reached? Will GP2 become the standard of care for breast cancer treatment?
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Regardless of this, the facts remain, GLSI stock has seen explosive returns just during Wednesday’s trading session. One trading group managed to identify this trend early on December 9th, catching the move from $17.47 as GLSI began picking up steam. One of the strategies used to stay in this volatile trade longer and take profit along the way was through a tier trading approach. This involved taking profit, scaling in, and scaling out of the trade throughout the session.
What’s Next For GLSI Stock?
If GLSI stock is on your watch list right now, you’re witnessing one of the unique scenarios that are typical with penny stocks. While not all penny stocks will breakout thousands of percentage points, more times than not, these types of breakouts will happen with stocks under $5. The smaller share structure paired with the fundamental news catalyst, and a likely mix of short interest has played out favorably for GLSI stock. What comes next? We’ll be following this closely as traders continue circulating this breakthrough development from Greenwich and its breast cancer treatment candidate.
