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Dhaka Tribune

ReShape Lifesciences (NASDAQ: RSLS) up 60% - But why in the name of….?

There seems to be very little reason for this stock price move therefore we think it won’t last.

Update : 25 Oct 2023, 04:39 PM

ReShape Lifesciences (NASDAQ: RSLS) stock is up 60% this morning. RSLS stock has also fallen, over the years, from a $3,000 level to the current 30 odd cents. Obviously, there’s been the odd reverse stock split along the way there. But that is an appalling track record and one that we at least don’t see any great prospect of changing.

There is no particular news here to explain this price rise. Nothing on the ticker, no corporate announcement. We can have a look at what the company does: “ReShape Lifesciences Inc., a medical device company, provides products and services that manages and treat obesity and metabolic diseases in the United States, Australia, Europe, and internationally. The company’s product portfolio includes Lap-Band System, a minimally invasive long-term treatment of severe obesity and more invasive surgical stapling procedures, such as the gastric bypass or sleeve gastrectomy”. And that doesn’t fill with joy. Novo Nordisk has just destroyed that business sector with semaglutide. Gastric bands and substitutes are an ex-thing.

reshape

ReShape Technologies stock price from Google Finance

We’d be expecting the RSLS stock price to be moving the other way that is. But then we look at that stock price chart and come to a conclusion. So, it’s a nanocap stock - couple of $ million market cap. Doesn’t take much buying to move that. Further, a concentrated burst of buying in the thin aftermarket will move the price considerably. At which point it’s easy enough to build a position then pump the price. With the aim, of course, of then selling into that momentum trade.

Which is, in the absence of any other evidence, what we’re going to call this. Just one of those little speculative flurries that happen in nanocaps and thin markets. Also, as such, something we’d expect to fade away soon enough.

 

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