The Zomedica (ZOM) stock could be dropping down. As the price is off by 20% in premarket trading at 8 a.m. Eastern. ZOM stock had obtained 146% this month.
Why the fall? It could be profit-taking after the stocks, which have been 6 cents a piece in the last year, started to rise in late Nov. They opened the year at 23 cents a share and closed at $2.70 yesterday.
It probably could be the veterinary health company’s news. The underwriter of its earlier announced common stock offering pledged to purchase 91.31 million shares at $1.90 per share, a 29.6% discount from yesterday’s closing price.
For those unaware, ZOM wants to revolutionize pet care. To do that, it wants to make sure veterinarians have the sources they need to diagnose and treat pets. Currently, Truforma, a point-of-care platform, commits to do just that.
ZOM stock exhibits trading bias.
Last week, analyst Matt McCall warned that as traders have fun with the stock, long-term investors should be aware. He wrote, “There’s no other way to look at ZOM stock and debate that its rally has been driven by long-term, buy-and-hold investors. It’s noticeably obvious that traders are behind the move.”
Just a day before McCall’s missive, ZOM share rallied 20%+ as the influence of the company’s recent partnership with Miller Veterinary Supply. The agreement is to distribute Truforma. Zomedica aims to launch sales on 30th March, which means a huge catalyst for ZOM stock is just some weeks away. Truforma will be in reach for more vets, as the partner has a presence starting from Texas to Maine.
McCall acknowledged that the Truforma promotion could provide long-term investors a reason for some optimism. But fundamental limitations, including an accessible market size that “rarely seems huge enough to support its valuation”, should be a cause of worry.