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iSpecimen Stock Price Fell 20.6% on a $21M Share Placement. Should You Buy It?

Simon Mugo trader
Updated 29 Nov 2021

iSpecimen Inc (NASDAQ: ISPC) stock price fell by 20.6% during premarket trading after announcing a $21 million private placement with three accredited investors.

The biotech company sold 1.75 million shares to the three investors at $12 each, representing a 31.5% discount to its closing price on Friday.

The private placement also included issuing warrants to purchase over 1.31 million shares in the future at $13 per share.

The sale of the new shares comes when iSpecimen has seen its shares rally higher, and one could argue that the company wanted to take advantage of the recent surge in its share price, which is never a bad idea.

However, the question on most investors mids is, does the biotech company have positive prospects? To answer this question, we must dig into its fundamentals to discover its key business drivers.

The recent rally in iSpecimen shares was driven by the award of a contract by the US government, which should generate significant revenues for the company.

The biotech company has built a name for itself as a reliable supplier of serum samples to US government agencies such as the Centers for Disease Control and Prevention.

The continuing emergence of new variants of the SARS-CoV-2 virus means that its business will keep growing as both governments and research organisations contract it to provide serum samples for the new COVID-19 variants.

Therefore, iSpecimen’s prospects appear pretty positive, and this should be reflected in its share price over the long term. However, most investors will hope that today’s capital raise will mark the company’s last dilution of existing shareholders.

Investors are likely to get better entry positions in future on further declines given the recent parabolic rally in iSpecimen’s share price, which is typically followed by significant pullbacks, as evidenced by today’s decline.

*This is not investment advice. Always do your due diligence before making investment decisions.

iSpecimen stock price.

Tradingview chart of iSpecimen stock price 29-11-2021
Source: Tradingview

iSpecimen stock price fell 20.56% to trade at $13.91, falling from Friday’s closing price of $17.51.

Is Now a Good Time to Invest In iSpecimen Shares?

Healthcare stocks, including iSpecimen shares, saw a wave of investors buy their shares during the pandemic. Governments also pumped money into the companies in an attempt to speed up the vaccine process. But, what happens now vaccines have been approved and the pandemic is becoming less prominent? Should we still invest in coronavirus-focused healthcare stocks? Or should we look to firms tackling other areas? Here are the best healthcare stocks to buy now…

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading