Berkeley Lights calls short seller’s report ‘highly misleading,’ and stock bounces sharply off record low

Shares of Berkeley Lights Inc. bounced sharply Friday, after the cell biology firm responded to a brief vendor’s report that had helped gasoline a brutal selloff to report lows, and as analysts additionally got here to the corporate’s protection.

The inventory

shot up 12.0% in afternoon buying and selling, placing them on monitor to snap a seven-day dropping streak. The inventory had plunged 37.0% throughout that streak to shut Thursday at $23.53, the bottom worth because the firm went public in July 2020.

The plunge was punctuated by a 28.2% tumble the previous two days, after quick vendor Scorpion Capital published a report on Sept. 15 alleging it had heard from a “path of shoppers” that stated they have been “tricked, misled or over-promised” into shopping for Berkeley Lights’ (BLI) Beacon platform for $2 million.

“The fact is so removed from BLI’s grandiose hype that we consider its product claims and practices might represent outright fraud,” the Scorpion report stated.

Scorpion, which says it’s within the “activist quick promoting” enterprise, stated it’s draw back goal for Berkeley Lights shares is $0.

In an 8-Okay submitting with the Securities and Trade Fee on Friday, BLI stated it had “continued confidence” in its enterprise, buyer relationships and its know-how, which permits its prospects to seek out the biology that cures illness.

“The report from Scorpion, a self-proclaimed quick vendor, comprises extremely deceptive statements, groundless claims and a transparent lack of trade understanding,” the corporate stated in its assertion. “It’s necessary to notice that Scorpion by no means reached out to us previous to the publication of their report. We consider the only goal of the report was to serve the quick vendor’s pursuits on the expense of Berkeley Lights shareholders.”

The inventory’s drop had come as the newest change information confirmed that quick curiosity, or bets that the inventory would fall, had elevated to a report 4.42 million shares as of the top of August. That lifted short interest as a percent of the public float, or share out there to commerce by the general public, at 8.99%.

Additionally learn: Short sellers are not evil, but they are misunderstood.

FactSet, MarketWatch

Analyst Julia Qin at J.P. Morgan reiterated her obese ranking on BLI and her inventory worth goal of $100, which means a close to four-fold achieve from present ranges, saying the “drastic” inventory response to the quick vendor’s report is “method overdone,” and creates a horny shopping for alternative.

“Total, we see little benefit in a lot of the accusations made within the quick report, and we consider the underlying worth proposition of BLI’s Beacon platform stays intact,” Qin wrote in a word to shoppers. “In reality, BLI had prospects on web site yesterday who expressed no concern in response to the Scorpion report.”

Stifel Nicolaus’s Daniel Arias additionally defended the corporate, saying its portfolio of biology merchandise are “extremely transformational.” He affirmed his purchase ranking, and his worth goal of $61.

“The largest criticism that has been leveled towards BLI is aimed toward efficiency of the Beacon platform, which was kind of a referred to as a ineffective machine,” Arias wrote. “Our calls with prospects yielded the other view.”

BLI went public on July 17, 2020 at an IPO price of $22, which valued the corporate at about $1.3 billion. The inventory closed its first day of buying and selling at $65.45, then rose to a closing report of $106.00 on Dec. 22, 2020. At the moment, quick curiosity was 1.17 million shares.

The inventory has plummeted 70.5% 12 months up to now, whereas the iShares Biotechnology exchange-traded fund
of which BLI is a element, has climbed 13.8% and the S&P 500 index

has superior 18.1%. | Berkeley Lights calls quick vendor’s report ‘extremely deceptive,’ and inventory bounces sharply off report low


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