SCworx Corp (WORX: NASDAQ) had a historical day yesterday opening from $2.25 and catapulting itself to highs of $14.00 before closing the ride at $12.02. It is remarkably rare to see gains at this level over one day. The sublime increase came after Scworx Corp announced they had received a purchase “provision” for 48 million IgM/IgG Rapid Detection Kits from Rethink My Healthcare.
The order will supply Rethink My Healthcare 2 million COVID-19 tests a week for 23 weeks on top of the initial 2 million tests. It is estimated that this deal could generate WORX $35 million a week in revenue (market value) for 23 weeks. An eye-watering total of $840 million. Investors quick enough to hear the news before 1pm made some significant returns. The stock began to even-out in the afternoon before finding an equilibrium at $12.00.
A quick summary on Scworx Corp
“SCWorx started as a small team of hard-working individuals focused on providing the best SaaS-based advanced solution to help manage health care provider’s complex supply information.” said Marc Schessel, CEO in a statement.
The New York based company deals with Healthcare logistics, delivering a solution to the primary supply chain problem the US industry faces. The firm has actually had a fall from grace in previous years. Before yesterday’s incredible rally, the stock had bottomed out at $2.50 for over 6 months.
It will be interesting to see if the stock can maintain its value as the deal could fall out under contract agreements regarding quality etc. We have already seen many COVID-19 related Bio-techs “pumped and dumped” such as:
- iBio’s plant based vaccine
- Hoth Therapeutics and their progress in producing a vaccine
- Biomerica and their “10 minute tests”
Is there room to make money?
Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.
Now for the reason you are probably still reading. The Biotech industry has remained one of the most volatile sectors regarding stock movements. From the list above, we have seen countless “opportunities” and false alarms on developments to combat COVID-19. However, this would have to be one of the most fascinating stories I have come across so far.
This company will not yield the potential of a Vaccine. However, fast-testing across the Globe is much needed. Pre-markets suggest a movement south, pricing WORX at $10.50. An investment at $10.50 still holds significant risk, as short term speccies may pullback on yesterdays gain. A re-evaluation at midday New York time maybe your best option in deciding whether there is room to make money (opinion, not advice). Ensuring there are no bottlenecks in the production of the tests, we could be looking at a steady incline of growth over the next few weeks.
It is wise to remember that any bad news or fall-out in the deal will cause a drop. Taking into account the risks, in my opinion, this opportunity could still yield potential if the deal is sustained and an entry re-valuation tomorrow is successful.
Is this a step forward?
The efficiency will give Governments confidence in letting some restrictions lift IF there is a fast, reliable, and cheap testing method. They will be able to test people before working, travelling, teaching, and commuting. This gives Governments some control over who is sick and who is not. The now infamous Dr. Fauci has also expressed the importance of testing in re-opening the US economy as we know it.
WATCH: Dr. Fauci explains why mass coronavirus antibody testing could be part of a path to reopening the U.S.
“Antibody gives you an idea of the number of people that have been exposed and infected — and have actually recovered.”https://t.co/7LjuT0wZzY
— MSNBC (@MSNBC) April 10, 2020
“Widespread testing for COVID-19 disease in the United States is absolutely critical for saving lives and reopening our economy,” Marc Schessel, CEO of SCWorx
No doubt this is a brilliant opportunity. However, practise caution when entering any Biotech stock related to COVID-19. Enjoy the week.
Here is our free, uncomplicated, and extensive ASX portfolio
Here is our free, uncomplicated, and extensive breakdown of smart COVID-19 Strategies
The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research.
Written by Tyger Fitzpatrick, Founder of YIG.