Many investors sell reflexively as soon as a reverse split is either announced or takes place. Sometimes this is because the Company's fundamentals are rotton to the core, but sometimes it leads to an oversold condition. This is the second reverse split ABIO has taken, the first one being after the time Ted Love's Company HYSQ reverse merged with ABIO. At the time, ABIO just wanted their cash and burned through it with a failed trial. However, Bucindolol did show promise in heart failure among African Americans, which kept the drug development program alive.
In February, the stock ran up to $6 (R/S adjusted), but ended the month around where we are now. Alot of shares changed hands in the last two weeks. Some people gave up after the double hit, even after acknowledging that the sole purpose of the R/S was to maintain their NASD listing. There are no options on the stock where one can hedge.
I'm only trading this stock for the sole purpose of making money. I don't like their ATM financing. I'm disappointed in management's inability to advance the drug to phase 3 trials through a partner. I'm real disappointed in previous management who sold out HYSQ shareholders at a discount, even after knowing that ABIO's phase 3 trial didn't meet their endpoint and still submitted it to the FDA for rejection. They would have been far better off returning money to shareholders.
However, I do see a positive disconnect with this stock. Unlike other posters on this Message Board, I don't see the faintest possibility that they'll raise enough money to fund another phase 3 trial. They cannot go-it-alone. This means that any dilution that we see will be minimal, just to keep the Company afloat to find a partner. The low float will remain in effect and will keep speculators in the stock. With such a huge short interest, I can see the stock easily popping above 6. Moreover, there are other cash rich biotech companies with failed drugs looking for another reverse merger.