Novelion Therapeutics Inc (NASDAQ: NVLN) is having an incredibly strong start to the trading session this morning. However, if you go digging for SEC filings or press releases, you may be disappointed. The truth is that the company hasn’t released any news. Nonetheless, there’s a very good reason for the gains today. Below, we’ll talk about:
- Why NVLN is climbing;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
NVLN Climbs On Shareholder Request
As mentioned above, Novelion Therapeutics is having an incredibly strong start to the trading session this morning, but the company hasn’t released any news. So, what’s the deal?
Reports are starting to surface that a large shareholder has made a big request of the company. According to various reports, Healthcare Value Partners has urged the company to explore strategic options. Of course, this strategic option exploration, if the company agrees to it, will include a look at the potential sale of the company. With acquisitions generally coming at a premium, this could be a great move for NVLN.
The shareholder that requested the exploration is no small player in the game either. Healthcare Value Partners currently owns a 9.5% stake in the company. As a result of the large stake held in NVLN, the investor has a good ability to push the company in the direction that it would like to see it go.
Keep in mind however, that 9.5% is not 51%. The shareholder doesn’t have the voting power to force the company to move forward with an assessment of strategic alternatives. Nonetheless, with the relatively large stake, the investor does have some pull when it comes to large decisions like this being made.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Novelion Therapeutics, the company didn’t release any news of its own. However, the push by the shareholder to explore strategic options seems to be exciting investors. It makes sense too. If a strategic options exploration does take place, there is a chance that the company will put itself up for sale, demanding a strong premium and returning immediate value to shareholders. So, it’s not surprising to see that excited investors are sending the stock on a run for the top in the market this morning. At the moment (8:45), NVLN is trading at $1.53 per share after a gain of $0.55 per share or 56.12% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on NVLN. In particular, we’re interested in following the story surrounding the push by Healthcare Value Partners and whether or not the company actually does begin a strategic options exploration. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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