Clearmind Medicine (NASDAQ: CMND) stock should rise 3,000% today. This 30x rise in CMND stock is not a result of their gaining FDA approval or anything. It’s nothing that affects the actual underlying business at all. It’s a purely technical change in the stock price. It’s also a purely nominal change in it - no wallets will be fattened by this. There’s the one specific technical problem that has to be solved. This plan and process will solve that one problem - but not any of the others which afflict the business.
As we’ve said before about Clearmind Medicine: “Clearmind develops psychedelic medicines to treat varied problems - booze and cocaine addiction for example. This latest idea is to use a version of their base psychedelics to treat depression. This has its merits - there's a lot of colloquial chatter about how they can indeed be useful in alleviating at least some symptoms. So it's not a strange idea. What's really happening here is that the new and more relaxed legal regime surrounding psychedelics allows proper research into their effects - beneficial ones that is.” It’s an entirely valid idea. But ideas also depend upon their implementation which seems to be somewhat lacking here.
Clearmind Medicine stock price from Google Finance
As we’ve also said about CMND stock: “We can and should use this as a lesson in how this part of capitalism is financed - with capital. Clearmind is developing antialcohol treatments and until something is actually passed by the FDA anything in pharma development has no great value. Anything and everything in development is merely a money sink. It's also true that few to none will lend into such a process. It all has to be funded by stockholder capital. Therefore companies in this field regularly raise more capital by issuing more stock. This is just how the sector works.”
They’ve not, so far, developed anything that works. Thus that stock price. Which is the problem to be solved. They’ll need to raise more capital at some point which means keeping the Nasdaq listing. But penny stocks get thrown off Nasdaq eventually. The solution to this is to declare that 30 old shares are now one new one - a one for 30 reverse stock split: “Clearmind Medicine Inc. (CMND) will effect a one-for-thirty (1-30) reverse split of its Common Shares. The reverse stock split will become effective on TUESDSAY, November 28, 2023.” The stock price reacts to this mechanically, rising 3,000% or 30x.
This does solve the Nasdaq problem - for a bit at least. But it doesn;t solve the actual business problem of devising something that works and can therefore be sold.
