This week is another big week for the stock market, with CPI data coming on Wednesday. To identify peak inflation and a hopeful tipping point for the economy, traders await feverishly for some resolve. In the meantime, it doesn’t matter if you’re trading penny stocks or higher-priced names like Apple (NASDAQ: AAPL) or Amazon (NASDAQ: AMZN), the pain of a stock market crash is hard to avoid.
Here’s how markets stack so far this year based on popular ETFs:
- The Dow Jones ETF (NYSE: DIA) is down 11% since January 3rd.
- The S&P 500 ETF (NYSE: SPY) is down 15.45% as of Monday’s premarket lows at $402.69.
- Nasdaq’s QQQ ETF has slipped more than 24%.
- The Russell 2000 Small-Cap ETF (NYSE: IWM) dropped 20% year to date.
With sweeping drops in the market and indexes hovering in bear market territory, it’s becoming a very interesting time in the stock market today. You’ve also got pundits suggesting that the stock market crash of 2022 has only just begun. According to economists at banks such as Goldman Sachs, other risks of a recession also persist. Rising commodity prices will likely result in a drag on consumer spending, as households — and lower-income households in particular — are forced to spend a larger share of income on food and gas,” they told clients earlier this year.
Is It Safe To Buy Penny Stocks?
With a risk-off strategy that some investors have taken, you might assume that high-risk assets, including penny stocks, are out of the question. If you look at popular message board sites like Reddit and social media outlets like Twitter, it’s a much different sentiment. Many retail traders choose to trade penny stocks instead of planting a long-term flag by investing in the stock market.
The day-to-day volatility has opened new opportunities for traders with some skills to benefit from wild swings in cheap stocks. Today we look at a handful of companies turning heads early, making big moves while the stock market crash rages on.
- LogicBio Therapeutics Inc. (NASDAQ: LOGC)
- ServiceSource International, LLC (NASDAQ: SREV)
- RealNetworks Inc. (NASDAQ: RNWK)
- Acer Therapeutics Inc. (NASDAQ: ACER)
LogicBio Therapeutics Inc. (NASDAQ: LOGC)
One of the exciting things about penny stocks is that many things can act as potential catalysts. Today, a slew of headlines has prompted bullish interest in several of these cheap stocks. LogicBio shares surged during early morning trading thanks to FDA-related headlines.
The company announced that the Food & Drug Administration lifted a clinical hold on its LB-001 Investigational New Drug Application. This is LogicBio’s drug candidate in a current SUNRISE trial in pediatric patients with methylmalonic acidemia. The original hold was placed on the IND for LB-001 following adverse events in the trial.
LogicBio now expects to move forward with dosing after making adjustments reflective of the conversations with the FDA. The company also reinstated previous guidance and anticipated a presentation of interim data by the end of this quarter. Shares surged during premarket trading on Monday after news headlines emerged.
ServiceSource International, LLC (NASDAQ: SREV)
Like LogicBio, ServiceSource has also made it into the news cycle. The B2B digital sales and service company has traded higher for most of the year, mainly after reporting full-year earnings results in February.
“The progress and performance we demonstrated throughout the year give us confidence in our long-term financial priorities and our ability to deliver on them. We remain focused on our strategy and the value we believe successful execution can create for all of our stakeholders.”Gary B. Moore, ServiceSource’s chairman and chief executive officer.
Fast-forward to this week, and ServiceSource is expected to release its next round of earnings on Tuesday. But that isn’t what’s driving interest. CEO Moore’s strategic focus seems to have paid off as headlines shift focus to the M&A arena. SericeSource is set to be acquired by Concentrix Corporation (NASDAQ: CNXC) in an all-cash transaction. ServiceSource shareholders will receive $1.50 per share in cash, representing a 47% premium to Friday’s closing price.
“We’re seeing significant opportunities for growth in our B2B sales business today, and ServiceSource’s complementary capabilities and footprint in this space, combined with our leading portfolio of CX offerings, will enable us to quickly and successfully scale to meet demand with existing and new clients,” Concentrix Chief Executive Chris Caldwell said in response to the buyout.
RealNetworks Inc. (NASDAQ: RNWK)
Thanks to unassuming activist investors like Elon Musk, no company is out of the question for an acquisition. The Tesla CEO has continued focusing on a take-private deal with social media company Twitter. Meanwhile, the same M&A trend is becoming apparent in the small- & micro-cap arena. Not only did we see it with ServiceSource, but RealNetworks may also be in the running.
The AI-based software solutions company was given an unsolicited proposal from none other than its founder, chairman, and CEO, Rob Glaser. He proposes to buy all shares of Real Networks that he and his affiliates don’t own at $0.67 per share in cash. Glaser and his cohort currently own around 38% of the company’s outstanding shares, according to a Monday morning press release.
“While this offer initiates a process that will unfold over a period of time, we want to assure all of our agents and clients that business will continue as usual, and we expect there to be no change in the products, services, or support we provide,” said Glaser. If RNWK stock is on your watch list right now, you might be left out in the cold as far as continuous flow information is concerned. The company said it doesn’t plan on disclosing developments unless a specific transaction is approved.
Acer Therapeutics Inc. (NASDAQ: ACER)
The biotech company Acer Therapeutics is on the move early after releasing an update on an agreement with the FDA. The company’s deal with the Food & Drug Administration is under a Special Protocol Assessment for its Phase 3 DiSCOVER trial of EDSIVO. This is its potential treatment for patients with COL3A1-positive vascular Ehlers-Danlos Syndrome. EDSIVO is the same treatment granted Breakthrough Therapy designation in the US last month.
Adrian Quartel, MD, CMO of Acer, “The SPA underscores our alignment with FDA on important regulatory, clinical and scientific requirements for our planned Phase 3 trial and reflects our ongoing commitment to the vEDS patient community. We are planning for trial initiation by the end of Q2 2022.”
With the news circulating this morning, ACER stock has hit watch lists early. Later this month, the company will present at the HC Wainwright Global Investment Conference on May 24th.
Penny Stocks To Watch
Whether it’s penny stocks with news or speculative momentum, knowing why certain stocks are moving can help you better formulate a trading strategy. In the stock market today, with things crashing, that plan can make a huge difference in your ability to navigate wild volatility. If you’re brand new to trading, check out some of our beginner articles: