Why Tonix Pharmaceuticals Continued to Plummet Today
Tonix Pharmaceuticals (NASDAQ: TNXP) is a biotech stock that's having an absolutely awful week. On Wednesday, the company's shares fell sharply for a third straight day, closing more than 13% lower. Investors are clearly shaken by Tonix's current attempt at financial engineering.
On Monday, Tonix announced it was enacting a reverse stock split in order to head off a potential delisting of its shares on the Nasdaq exchange. The Nasdaq requires its stocks to maintain a bid price of $1 per share at a minimum.
A reverse stock split is typically -- and rightfully, in many cases -- seen as an act of desperation from a furiously struggling company. Compounding that, in this instance Tonix is reverse-splitting at quite a high rate, at one share for every 32 previously in existence.
Source Fool.com
