Venus Concept Shares Tripled On Wednesday: Here's What Happened

Venus Concept Inc. VERO shares traded higher on Wednesday after the company secured $23.24 million in bridge financing from Madryn Health Partners.

What To Know: Venus Concept announced that entered into a Loan and Security Agreement with lenders last year. The company announced late Tuesday that the lenders agreed to provide bridge financing of approximately $23.24 million, up from the previous agreement of up to $5 million.

In addition, Venus Concept announced it exchanged $11 million in subordinated convertible notes for 379,311 shares of Series Y preferred stock. This transaction reduces the company’s total debt to approximately $35.5 million, down significantly from $76.7 million a year ago and from $39.7 million at the end of last quarter.

The price action in shares potentially reflects the investor response to a combination of new capital inflow and a reduced debt burden. The financing deal and debt conversion may signal stronger short-term liquidity and an effort to restructure obligations, both of which appear to be giving traders confidence.

It’s also worth noting that Venus Concept is considered a low-float stock with just 536,698 shares available for public trading, per Benzinga Pro. The company also had a market cap of less than $2 million as of Tuesday's close. Low-float, micro-cap stocks can be very volatile, which may help explain some of Wednesday's surge.

Is VERO A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like Venus Concept‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Venus Concept does not pay a dividend, but obviously has a few ways it can return value to shareholders.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Venus Concept will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

VERO Price Action: Venus shares closed Wednesday up 205.8% at $8.93, according to Benzinga Pro.