iBio (IBIO) Stock: Should You Buy On Weakness?

iBio IBIO Stock News

iBio Inc (NYSEAMERICAN: IBIO) has been a hot topic of discussion as of late. Since the company announced that it teamed up with CC Pharming to develop a vaccine for COVID-19, a.k.a. the Wuhan coronavirus, the stock has been rocketing.

That is, until yesterday. In fact, in a premarket post on the topic yesterday, I predicted that profit taking would start, and boy was I right. The stock fell nearly 9% on no news yesterday and the declines are continuing today.

Warren Buffett is known for buying on weakness and selling when greed runs high. Considering the weakness in IBIO, a big question weighing on the minds of investors is, “Should I buy the stock on weakness?” While each investor has different goals, different appetites for risk, and different portfolios and I cannot say if you should buy or sell a stock, I can give my opinion on the stock in general. Here’s how I see it:

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IBIO Declines Represent A Potentially Large Opportunity?

Would I buy today? Probably not. The truth of the matter is that with the 900% gains that we’ve seen from iBio over the past month, profit taking isn’t likely over. However, when it hits the bottom, this may be a big win.

While the recent partnership with CC Pharming was the catalyst that drove most of this movement, my excitement has to do with another factor that could lead to tremendous revenue potential in light of the coronavirus epidemic.

I’ve talked about this a bit in the past, but for those of you who have missed it, a very big point of value to consider here is the company’s FastPharming Facility. Commissioned as part of a government contract, with the FastPharming Facility, IBIO can manufacture vaccines incredibly quickly.

Considering that speed is a major factor in addressing any epidemic before it becomes a pandemic, this is a key competitive advantage. No matter if the company has its hands in the actual development of a viable vaccine or not, there’s a high likelihood that the end result of the race to develop a COVID-19 vaccine will be manufactured by IBIO. Then, we have the CC Pharming deal, which is icing on the cake.

Not only will the company likely be involved in the manufacturing of a vaccine, it may also be involved in the creation of a vialble vaccine. As mentioned above, the company recently teamed up with CC Pharming to develop a vaccine for the Wuhan coronavirus, and the team is a match made in heaven.

CC Pharming is no stranger to the development of vaccines. The company developed a vaccine for SARS-coronavirus, a cousin strain of the current epidemic strain, COVID-19. Experience in this particular type of vaccine will provide the team a strong competitive advantage in the race to develop a viable option.

CC Pharming’s knowledge in developing coronavirus-related vaccines, combined with iBio’s FastPharming Facility, makes the team a combined competitor to contend with!

The Recent Run Has Provided Other Benefits

The recent run in value has led to an unintended benefit. Before the run, IBIO was at risk. Due to its low stock price, the company was planning on moving forward with a reverse stock split.

However, late yesterday, the company announced that it is no longer planning on a reverse split. In the press release, the company said that it has decided not to pursue the reverse split based on stock activity as well as discussions with investment banks, investment funds, and other members of the investment community. At the end, IBIO came to the conclusion that a reverse split would not materially enhance investor interest or financing capabilities as the recent run has already taken care of any enhancement needed.

The Bottom Line

The bottom line here is simple. IBIO is falling as expected. Considering the recent run, if profit taking didn’t take place, I’d be surprised. However, once the profit taking is over and the stock reaches the floor, there’s likely a large opportunity to jump into. With the spread of the coronavirus and the advantages the company has in the vaccine space, major revenue opportunities may be ahead.

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