$FBLG DD: Small biopharma backed by BlackRock with possible upcoming catalysts Feb 11
*UPDATE:* With the SP now swinging between $1.8 and $2 risk involved in this investment for those looking to enter has substantially increased. Exercise extreme caution if buying in at these prices. There could be significant pull-back at EOD or moving into next week if the catalysts which I predict **may** happen do not actually happen.
Fibrobiologics
Overview: $FBLG is a stock that appears to have bottomed out at ~$1.60, an opportunity capitalised on by global investment firm BlackRock which has purchased a huge $2,871,952 worth of shares in the last wee. Alongside a SEPA and option awards with exercise prices at $2.41 and $2.381 respectively, there is universal confidence that $FBLG will soon reverse its downwards trend, likely triggered by the upcoming catalyst on the 10th/11th February.
Upcoming catalyst: Fibrobiologics has announced that they will be presenting “research & development updates” at an investor conference on the 10th and 11th February, alongside an in-house analyst day. We expect that these developments will serve as catalyst-level news flow, triggering a potential gap up to $3 or beyond.
- BlackRock Investment: On the 29th and 30th December, BlackRock purchased $2,871,952 shares worth (at around $1.6 per share) of Fibrobiologics. On the 29th and 30th January, there was more unusual activity, perhaps indicating a follow-up purchase from BlackRock as there were large volume spikes on the 1m candles, in tranches of 250,000 and 500,000.
- YA II SEPA: Similarly, Yorkville has entered into a $25m value SEPA with Fibroliogics, with rights to exercise their promissory notes at $2.381 (whereas current SP is 1.605).
- Employee options: Moreover, the board has been awarded its largest ever option awards with exercise price at $2.41: the CEO was awarded 406,339 shares.
Low downside: With a comfortable bottom seemingly established at $1.50, entry between $1.50 and $1.70 offers the opportunity for investment at very low downside risk, for potentially huge upside.
If there is no news from the investor conferences, consider exit.
We believe that the company strategy is to “pump” the share-price through the newsflow, which they will then seize advantage of by drawing on their shelf offering, exercise the SEPA, and exercise their options whilst the SP is favourable. As a result, the risk of dilution will continue to increase as the SP rises; this means that an exit strategy is crucial.