Ampio Pharmaceuticals (NYSE: AMPE) stock should rise 2,000% at the open today. AMPE stock’s 20x rise is not to be taken as relief for long suffering shareholders. This is a purely technical move, in that it is a change in the nominal price only. That is, no wallets will be fattened directly by this, although the indirect effects should be a modest gain. The 18% rise yesterday, now that was a real price change, this 2,000% today, this is a nominal one.
As to what’s done at Ampio Pharma: “Ampio Pharmaceuticals, Inc., a biopharmaceutical company, develops therapies for the treatment of osteoarthritis-related pain. It focuses on the preclinical development of AR-300, a novel proprietary, small molecule formulation for the treatment of osteoarthritis of the knee.” Well, OK, someone’s got to do that sort of thing so why not them? The stock is actually up this past year - 170% or so - which is unusual in this area of small cap pharma stocks. A more usual flight path is continual decline until something major - like FDA approval - happens, if that does actually happen.
They’re pre-revenue, they seem to have perhaps a year’s worth of runway left. But still, the stock is well below the $1 minimum bid price necessary to keep that NYSE listing alive. So, something must be done. For unless something turns around real soon now they’re going to need to raise more capital - which is the point of having the NYSE listing of course.
Ampio Pharmaceuticals stock price from Google Finance
The reason why this price problem is purely stock market fashion. The American markets think of penny stocks as being disreputable. It’s not that all of them are run by frauds and charlatans. It’s that when frauds and charlatans come out to play they tend to do so in this sector. So, the basic rule is that you can’t be a penny stock and also be on the two main markets. The two main markets being where the liquidity is and therefore the ability to raise new capital.
Thus something must be done, that something being to just declare that 20 old shares are now one new one. A one for 20 reverse stock split: “Ampio Pharmaceuticals, Inc. (AMPE) said its Board has approved a 20-to-1 reverse stock split of the company's common stock. The reverse stock split will become effective on September 11, 2023.” The stock therefore reacts mechanically, rising 2,000% or 20x.
As we say this doesn’t directly benefit anyone’s wallet. But keeping the listing should be of value so there could be a further modest reaction in the real price.
