Jaguar Health, Inc. (NASDAQ: JAGX) experienced a tumultuous trading session on Friday, witnessing a nearly 10% drop from $0.29 to $0.26. The situation worsened over the weekend, and by Monday’s premarket hours, the stock had plunged further to the $0.18 zone, reflecting a significant loss in investor confidence.
Stock Performance and Volume Surge
The substantial decline in Jaguar Health’s stock price was accompanied by an unprecedented surge in trading volume, with nearly 58 million shares changing hands. This volume spike was primarily driven by sellers offloading their shares, exacerbating the downward pressure on the stock.
The sharp drop reflects market apprehension surrounding the company’s financial health and upcoming corporate actions.
Company Overview and Reverse Stock Split
Jaguar Health is a commercial-stage pharmaceuticals company engaged in developing gastrointestinal products, operating through Human Health and Animal Health segments.
Its Human Health segment focuses on Mytesi, a product for symptomatic relief of non-infectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. The Animal Health segment deals with both prescription and non-prescription products for companion and production animals.
A critical factor contributing to the recent stock performance is Jaguar Health’s history of significant share dilution. From 2022 to 2023, the number of outstanding shares skyrocketed from 2 million to 73 million.
In an effort to address these concerns and comply with Nasdaq’s listing standards, Jaguar Health will implement a one-for-sixty reverse stock split on Thursday, May 23, 2024. This move aims to consolidate shares, reduce outstanding share counts, and make the stock more attractive to institutional investors.
Conclusion
As Jaguar Health braces for its reverse stock split, investors remain cautious. The split, approved at a Special Meeting of Stockholders, will see every sixty shares reclassified into one share without changing the par value. The company hopes this strategic move will bolster compliance with Nasdaq’s standards and restore investor confidence. Stockholders will receive instructions from Equiniti Trust Company, LLC on how to exchange their certificates post-split.
