- Allena Pharma stock rallied 10.2% ahead of its special general meeting.
- The company is looking to consolidate its shares to boost its stock price.
- So, should you buy ALNA stock? Read on to find out.
Allena Pharmaceuticals Inc (NASDAQ: ALNA) stock price rallied 10.2% ahead of a special meeting to approve a reverse stock split that will push its share price back above $1, which is required for the company to maintain its listing on the NASDAQ exchange.
The NASDAQ usually delists stocks whose share price has been trading below $1 for six months, which is why most companies whose stock prices fall below $1 for an extended period tend to perform reverse stock splits to boost their stock price.
Also read: The Best Undervalued Stocks To Watch In 2022.
Allena had planned to hold the extraordinary general meeting on July 5, 2022, but postponed it at the last minute. The firm recently announced that the meeting would be held on August 4, 2022, where shareholders shall vote to approve the share consolidation measures.
The ALNA stock price has fallen 72.76% this year, with losses accelerating from March 22, 2022, when it announced that it had discontinued the clinical development of its lead drug candidate, reloxaliase, targeted at patients with enteric hyperoxaluria.
Financial analysts at B. Riley lowered their targets on ALNA stock following the discontinuation of the clinical development program citing a “financing overhang” at the company. As a result, the investment company lowered its price target from $3 to 50c, which is a drastic reduction.
Allena Pharma raised $2.8 million via a registered direct offering, further diluting existing shareholders and making its shares less attractive. However, today’s rally comes from nowhere since the company has not made any significant announcements.
Investors could be reacting to the meeting announcement made on Tuesday that went largely unnoticed by most people. Investor interest in ALNA shares was pretty high today as over 3.9 million shares had changed hands at writing.
So, should you buy Allena Pharma shares? I would not buy ALNA shares primarily due to the uncertainty regarding its other drug candidates after dropping its lead drug candidate. Furthermore, poor analysts’ ratings and price targets are bad.
*This is not investment advice. Always do your due diligence before making investment decisions.
Allena Pharma stock price.
The Allena Pharma stock price rallied 10.18% to trade at $0.1851, rising from Wednesday’s closing price of $0.1680.