GT Biopharma Retail Chatter Soars Most Among Biotechs After Financing Strategy Tweak

Shares of GT Biopharma, Inc. surged more than 21% on Tuesday before slipping after-hours as investors reacted to the company's unexpected shift in its financing strategy. 

The announcement sent 24-hour message volume on Stocktwits skyrocketing by 18,700%, marking the highest spike among biotech stocks, with trading volume more than doubling from its daily average.

The company said it had withdrawn its earlier Form S-1 registration, initially filed with the SEC in December, which sought approval for an automatic mixed securities shelf offering. 

The filing had not yet been declared effective, and no securities had been sold under the proposed offering. 

Instead, GT Biopharma opted for a direct warrant exercise agreement, securing immediate funds while offering new unregistered warrants to investors.

Under the new arrangement, the company entered into definitive agreements to exercise existing warrants to purchase 302,069 shares of common stock, with an exercise price of $4.35 per share. 

The move is expected to generate approximately $700,000 in gross proceeds before deducting placement agent fees and offering expenses.

The offering is anticipated to close by Thursday, with proceeds earmarked for working capital and general corporate purposes.

On Stocktwits, retail investors' reactions were mostly positive to the company's financing shift. 

One user described the move as "going in the right direction." 

Another pointed out that short sellers had expected dilution due to the S-1 registration, but they may now be forced to cover with the offering canceled. 

However, some traders indicated they were still waiting for a more attractive entry point.

Short interest on GTBP shares has jumped from 0.6% at the start of the year to 8.8% at the end of last week, per Koyfin data.

Beyond the financing development, Roth MKM remains optimistic about GT Biopharma's clinical pipeline. 

The research firm expects the company to release initial data later this year from its Phase 1 trial evaluating GTB-3650, its therapy targeting CD33-expressing hematologic malignancies, including acute myeloid leukemia (AML) and high-risk myelodysplastic syndrome.

GT Biopharma ended 2024 with approximately $4 million in cash, which Roth MKM estimates is sufficient to fund operations into the second quarter of this year. 

The research firm maintained a 'Buy' rating on the stock, with an $11 price target, implying a potential fivefold increase from current levels.

The company's stock has lost more than 17% year-to-date. 

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