After two years of underperformance, Cerebain Biotech Corp (OTCMKTS:CBBT) finds itself flirting with all-time lows having shed more than 80% in market value. However, the company is trying to make a comeback having initiated a review of its business and strategic growth plan.
Cerebain Biotech Price Analysis
The company announcing it is planning to tweak its corporate strategic initiatives has triggered renewed investors interest in the stock. Cerebain Biotech Corp has since started showing signs of bottoming out, from all-time lows, after succumbing to short selling pressure over the past year.
A spike in share price, as well as trading activity, attests to growing investor confidence as the company moves to rebrand itself in pursuit of shareholder value. The stock is already up by more than 90% in what could turn out to be a change in the direction of trade.
A recent spike has opened the door for buyers to push the stock to the $0.06 mark, which happens to be the immediate resistance level. A rally followed by a close above the critical resistance level should reaffirm the emerging uptrend, setting the stage for the stock to continue edging higher.
Given the underlying long-term trend, Cerebain Biotech Corp remains susceptible to further drops as short sellers remain in control below the $0.06 mark. However, if the company is serious about restructuring, then the stock should continue edging higher on strengthening investor confidence.
About Cerebain Biotech Corp
Cerebain Biotech Corp casts itself as a biomedical company focused on the discovery of a treatment for Alzheimer disease. The company also works on medical device solutions as well as synthetic drug solutions.
Why Cerebain Biotech Corp Bottoming Out?
Recent price action activity points to a stock that is ready to bottom out after a ferocious sell-off. A 90% plus a spike in share price follows the announcement that the company is working on new strategic initiatives.
The initiatives are not limited to the sale or divestiture of some of the company’s assets, rebranding or repositioning of the company’s overall business plan. The management has also confirmed they are working on a comprehensive growth strategy that bill focus on revenue generation.
In a bid to strengthen revenue generation capabilities, Cerebain Biotech Corp is considering a roll-up of an acquisition strategy that will target a number of candidates in select industries. The overall plan also involves the pursuit of value-enhancing initiatives key among them being, capital optimization policy, partnerships, and financing deals.
“We are committed to evaluating strategic alternatives that enhance value for our shareholders while maintaining our focus on the continued development of our device for the treatment of Alzheimer’s disease as well as aggressively managing our operating expenses,” said Eric Clemons, CEO of Cerebain.
As part of the ongoing restructuring, Cerebain Biotech has engaged the services of NMS Consulting Inc., a global management consulting and corporate strategy firm. The firm is to furnish the company with valuable insight on how to go about the restructuring drive, focusing on the identification of new opportunities and cost savings plan.
The announcement of the restructuring drive came months after Cerebain Biotech announced the addition of a new strategic partner to accelerate the advancement of device development. Early last year, the biotech company announced it was working on the development of a medical device for the treatment of Alzheimer disease and dementia. The company had inked a strategic partnership with Sonos Models Inc. for the development of the device.
Amidst the recent spike in share price and trading volume, Cerebain Biotech remains vulnerable to wild swings that could see it edge lower. Failure of the company to issue a definitive timeline on when it plans to complete the ongoing restructuring could trigger a negative reaction from investors going forward.
The company has also failed to provide assurances that the initiative pursuits will result in particular business or strategic transactions. The uncertainties involved with the restructuring is something that could deal the stock’s sentiments a big blow in the market.
However, the company succeeding in the implementation of new strategic initiatives able to reinvigorate revenue growth and shareholder value should strengthen investors’ confidence in the stock.
Given the uncertainties involved as Cerebain Biotech tries to rebrand itself, investors should look at CBBT as a high risk/high reward play.
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Disclosure: We have no position in CBBT and have not been compensated for this article.