SQZ Biotechnologies (OTCPK: SQZB) stock should rise 1,000% at the open. SQZB stock will make this rise on a purely technical basis - this is a mechanical response to a change, not a real price move in the value of the company. What makes this all slightly odd is that the usual reason for doing this doesn't apply here - SQZ has already lost the NYSE quotation.
As to what SQZ actually does: “SQZ Biotechnologies is a clinical-stage biotechnology company focused on unlocking the full potential of cell therapies. The company's proprietary Cell Squeeze® technology offers the unique ability to deliver multiple biological materials into many patient cell types to engineer what we believe can be a broad range of potential therapeutics.” That's what they themselves say and who are we to argue? The difficulty is that they don't do this very well. The stock is down 99% or so over time, 94% in just this past 12 months. That puts the price firmly in penny stock territory.
That's a problem because the New York markets - both NYSE and NASDAQ - insist that penny stocks are for the very devil. The marketplace is simply too associated with those Wolf of Wall Street types for penny stocks to remain in the polite company of the major exchanges. So, fall into penny stock territory and lose the quotation - eventually - on the major markets.
SQZ Biotechnologies stock price from OTC
The usual answer to this is to have a reverse stock split. Simply declare that what used to be 10 shares are now merely the 1. This is exactly what is happening to SQZB stock today - a 10 for 1 reverse stock split. This doesn't change the value or size of the company, just the number of shares which represent ownership of it. Therefore, purely mechanically, the price should rise by 10x, or 1,000%. Thus is the problem of being below the $1 minimum bid price solved.
That should be that - except we've the one more wrinkle at SQZ. Which is that they've already lost the NYSE quote and don't look like getting it back purely as a result of this reverse split. For they also fall foul of other rules: “NYSE Regulation reached its decision to delist the Company's common stock pursuant to Section 802.01B of the NYSE's Listed Company Manual because the Company had fallen below the NYSE's continued listing standard requiring listed companies to maintain an average global market capitalization over a consecutive 30 trading day period of at least $15,000,000.”
That's not something solved in this purely mechanical manner which is why SQZ is already trading as SQZB on the OTC instead of as SQZ on the NYSE. It also leaves us all wondering why they've bothered to do the reverse split as that NYSE listing is lost anyway but there we are.