ReShape Life Sciences (NASDAQ: RSLS) has been a favorite in the market in recent days, bringing on triple-digit growth, that has brought benefits to many players in the market. Recent updates may suggest that things may be about to change soon for the stock.
The RSLS Gains Hit the Ceiling.
Following a staggering performance in the market in recent days which saw ReShape Life Sciences (RSLS) climb from $6 to as high as $28, the aftermarket traders during the weekend have been pursuing a corrective sell-off. During the after-hours market, RSLS has dropped by as much as 33%, yet despite this it continues to trade at almost $12, still keeping its gains at an impressive level. Considering that the mighty gains of recent days had come about with no apparent fundamental shift or company update, it makes sense as to why traders began pulling out of their positions and cashing out their gains of RSLS
More Cause for Concern
In addition to the sizeable price pump, market traders continue to hold hesitance regarding RSLS, due to some recent updates. Recently, ReShape management asked the SEC to take down two filings that it erroneously submitted. However, one filing remains in place which indicates that 1.2 million shares will be issued in the near-term future, which will come with a warrant to each holder. For a company with a market capitalization of barely $8 million, and a share price of above $20, this dilution could result in a substantial fall in its price. This may be the primary reason as to why the market has been shifting gears on RSLS stock.
RSLS stock has brought on an epic rise in recent days, but many factors suggest that its days of glory may well be behind it, moving forward. There are several concerns such as a possible share dilution, which may explain the after-market plunge the stock has been seeing lately.