Harpoon Therapeutics (NASDAQ: HARP) stock should rise 1,000% at the open today. HARP stock is not going to rise 10x because they’ve suddenly sorted out how to make the company vastly profitable. Rather, this is a purely technical and nominal price change designed to deal with one specific problem the company faces - keeping the NASDAQ listing. There are rules and fashions about how can be on the major stock exchanges, Harpoon is in breach of one of them. That’s just something that has to be solved.
As to what’s done at Harpoon Thera: “Harpoon Therapeutics, Inc., a clinical-stage immunotherapy company, engages in the development of a novel class of T cell engagers that harness the power of the body’s immune system to treat patients suffering from cancer and other diseases in the United States. The company develops tri-specific T cell activating construct (TriTAC) product candidate, including HPN328, which is in Phase I/II clinical trials for the treatment of small cell lung cancer and other Delta-like canonical Notch ligand 3-expressing tumors; and HPN217 that is in Phase I clinical trials for the treatment of multiple myeloma” and so on.
It doesn’t do this particularly badly either. They’re able to gain collaboration and licence revenue which - just - covers costs in the latest quarter for example. Obviously everything depends upon who well the drugs turn out but the process seems to be being managed well enough.
Harpoon Therapeutics stock price from Google Finance
That’s not enough though for this specific problem. Which is that NASDAQ doesn’t like penny stocks. Part fashion, part culture, penny stocks are just associated with the bad parts of stock markets - manipulators and so on. So, there’s the $1 minimum bid price. Sure, Harpoon goes above that sometimes (but the technical demand is for more than 10 days) but it’s on the edge. So, something should be done.
That something is to declare that 10 old shares become one new one. A one for 10 reverse stock split: “Harpoon Therapeutics, Inc. (HARP) will effect a one-for-ten (1-10) reverse split of its Common stock. The reverse stock split will become effective on Tuesday, September 5, 2023.”
This doesn’t change - not directly, - the market capitalisation of the company. It does change the number of shares that make up that ownership. Therefore the stock price changes, mechanically, in the same portion - up 1,000% or 10x. This is a purely nominal stock price change for Harpoon, one that just ensures the NASDAQ listing and that’s it.
