Sienna Biopharmaceuticals (SNNA) Stock Pops On Takeover Chatter

Sienna Biopharmaceuticals SNNA Stock News

Sienna Biopharmaceuticals Inc (NASDAQ: SNNA) stock just spiked more than 60% and was halted due to the volatility associated with the spike. With no news out, many are scratching their heads wondering why the stock made a sudden run for the top.

The gains seem to be associated with a rumor that suggests that the company will soon be taken over. Here’s what’s going on:

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SNNA Stock Spikes And Is Halted On Takeover Chatter

At the moment, rumors are hitting the tape surrounding Sienna Biopharmaceuticals. According to the rumors, the company may soon be taken over.

However, the rumors are quite vague. In fact, there has been no mention of who the potential suitor is, what price the takeover would garner, nor if it is going to be a cash transaciton, stock transaction, or mix of the two.

In most cases, when rumors are this vague and seem to come out of nowhere, I dismiss them. However, this one may have some validity.

About a week ago, SNNA announced that it has hired Cown as an independent financial advisor. In the release, the company said that Cowen will assist in the exploration of financial and strategic alternatives with the goal of increasing shareholder value.

Of course, these types of reviews almost always include a review of the potential sale of the company or its assets. So, we know that SNNA is looking for opportunities and if one arises, is likely to take it.

Moreover, the company has quite a bit to offer the right suitor. In fact, the company will be initiating a planned pivotal clinical trial for SNA-120 relatively soon. The treatment is being developed as a potential option for patients with psoriasis, an indication in a market that is expected to grow to be worth more than $22 billion by 2022.

Consider The Risks

While the rumors are running and so is the stock, it’s also important to consider the risks. The truth of the matter is that rumors are the most common way that today’s stock market is manipulated.

Unfortunately, without verification from SNNA or a potential suitor, there’s nothing set in stone and acquisition talks may not be taking place. So, if you’re going to make a move on this, or any other, rumor, please do so with caution!

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