Novavax Continues Huge Run, Short Seller Sees Stock Falling Back To $15

Shares of Novavax, Inc. NVAX gained more than 25% by Monday, leading a notable short seller to tweet his thoughts on the stock.

What Happened

Novavax announced on April 16 it will start a COVID-19 vaccine called SARS-CoV-2 Recombinant Spike Protein Nanoparticle, NVX-CoV2373 within the coming weeks. The stock's momentum on Monday is directly attributed to the announcement and investors are hopeful it can see some success with its trials.

Citron Research said Monday afternoon that Novavax is a "serial promise and non deliver" on every virus. Citron said company insiders sold "most holdings" last year.

As much as Citron wants a vaccine $NVAX is a serial promise and non deliver on every virus. Insiders sold most holding 85% lower last year. Bal sheet upside down and $$ is needed for NanoFlu. Expect secondary soon and stock back to $15. Retail mania!!

— Citron Research (@CitronResearch) April 20, 2020

Why It's Important

Novavax's stock has become a big play of the COVID-19 pandemic and traders took advantage of several surges.

The stock rallied on March 24 after the company announced positive top-line results for its influenza vaccine candidate NanoFlu, which was evaluated in adults aged 65 and older.

Novavax's balance sheet is "upside down" and it will need cash for its trials, according to Citron. As such, investors should expect the company to announce a secondary offering "soon" and the stock will come back to $15 per share.

The stock traded around $24 per share at time of publication.

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