XORTX Therapeutics (NASDAQ: XRTX) stock is up 138%. Which could be nice, of course it could, if it weren’t for the fact that XRTX stock has risen for really a very silly reason indeed. They’ve not sorted out the business, not gained FDA approval of anything, they’ve only and just announced that they’re hoping to sort out the Nasdaq $1 minimum bid price problem. And while that is a problem, one that does have to be solved, it’s not the sort of problem where a solution is worth 140% on the market capitalisation. No, really, it’s just not.
As to what’s done at the company: “XORTX Therapeutics Inc., a late stage clinical pharmaceutical company, engages in the development and commercialization of therapies to treat progressive kidney diseases, diabetes, insulin resistance, metabolic syndrome, diabetes, diabetic nephropathy, and infection. It develops XRx-008, a late clinical stage program therapy for autosomal dominant polycystic kidney disease;” and so on. OK, that’s fine. We all also know that pharma development eats capital, that it’s risky and so on.
XORX Therapeutics stock price from Google Finance
So, what’s the trigger here? “XORTX Therapeutics Inc. ("XORTX" or the “Company”) (NASDAQ: XRTX | TSXV: XRTX | Frankfurt: ANU), a late-stage clinical pharmaceutical company focused on developing innovative therapies to treat progressive kidney disease, announces that the Company has called a special meeting of shareholders for 10:00 a.m. (Calgary time) on October 25, 2023 (the “Meeting”).” OK, what’s the meeting about? “The meeting has been called for shareholders to consider a consolidation of the Company’s issued and outstanding shares in order for the Company to comply with continued listing requirements for the NASDAQ Capital Market.”
And that’s it. No, really. A shareholder meeting to approve a consolidation, or reverse sare split.
This is not worth 138% on the market capitalisation and XRTX stock price. It is a good excuse for a few mem bro’s to start off a momentum trade but no more than that. And the thing about momentum trades is that they do stop, then reverse, as reality intrudes into the speculative fervour. We can’t even see that there’s a short interest to squeeze to support this. We expect this to fade pretty quickly.