BioCryst Pharmaceuticals, Inc. (NASDAQ: BCRX) is screaming for the top in the market this morning. While the company hasn’t issued any press releases, the gains seem to be the result of a filing, showing that BlackRock has upped its ante in the company. Here’s what’s going on:
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BlackRock dives into BioCryst Pharmaceuticals
BioCryst Pharmaceuticals didn’t come out with any compelling news this morning, but it didn’t have to. Investors are excited about the stock after one of the world’s largest investment management firms, BlackRock filed a document with the United States Securities and Exchange Commission.
According to the filing, BlackRock has increased its stake in BCRX stock, and in a big way. As of right now, the investment management firm owns 16,259,745 shares of BCRX stock, representing a 9.2% ownership stake in the company.
Why Investors Are Excited
BlackRock is one of the largest, and most well known, investment management companies on Wall Street. As you could imagine, the company employs some of the world’s brightest analysts and market professionals who have made the stock market the center of their attention.
As such, the company is known for making compelling moves on Wall Street, and when it does, retail investors seem to follow.
Think of it this way, if you want to learn to play basketball, it would be great to have LeBron James on your side. Well, investors don’t necessarily need a pro as a coach. Everything the big guys do is disclosed. Therefore, by following big money, little money turns to big money.
All in all, investors are excited that big money has taken interest in BCRX stock and are following in big money’s footsteps, buying shares of their own.
A Short Squeeze in Play
The short squeeze has been a hot topic of conversation in the stock market since a Reddit group by the name of Wall Street Bets began squeezing the shorts out of GameStop, AMC, and Nokia. Nonetheless, if you’re looking for the next big short squeeze, you may have found it with BioCryst Pharmaceuticals.
At the moment, short interest on the stock is over 10%. However, I believe those shorts have already started being squeezed, as is evidenced by the more than 30% premarket gains in BCRX stock this morning.
If the squeeze continues, the dramatic gains on the stock could just be the beginning.
What Analysts Think About BCRX Stock
Analysts seem to love BioCryst Pharmaceuticals stock. In fact, according to TipRanks, there are nine analysts that currently cover the stock, seven of which rate the stock a Buy. Two analysts rate the stock a Hold with no sell ratings to speak of.
Price targets range from $9.00 to $16.00 with a median price target of $11.63. However, these price targets were set prior to the approval of Orladyo in Japan. As a result of the approval, I’m expecting for price targets to be increased as analysts re-review the stock.
Risks to Consider Before Buying BCRX Stock
An investment in BCRX stock comes with risk, just like any other investment you’ll ever make. Before diving in, some of the most significant risks to consider include:
- Profitability. BioCryst Pharmaceuticals currently operates at a loss. If the money the company has in the bank dries up prior to the company reaching profitability, it may look to capital markets as a means to raise funds. Should this be the case, existing shareholder value will be diluted and the stock will likely experience significant declines.
- Early Stages. BCRX is in the very early stages of commercialization. While their Orladyo performed well in the clinic, consumers must be interested in taking the drug for the company to be profitable. Ultimately, adoption is yet to be seen, and until there’s a record of sales and profitability, the early stage nature of the company makes an investment in its stock a speculative bet.
I primed the risk section above by saying that while an investment in BCRX comes with risk, any investment you make will. The section wasn’t designed to scare you away. In fact, I see the stock as a great investment opportunity.
HAE is a massive market, generating more than $2 billion in revenue for the companies that operate within it per year. Moreover, there are few therapeutic options. So, tapping into this market with an option that clinical data shows is superior to anything out there sets the stage for potentially significant growth ahead. All in all, BCRX stock is one to watch.