KaloBios Pharmaceuticals Inc. (NASDAQ:KBIO) is down 22.34% in pre-market trading, after closing up 30.79% on Friday. Its high volatility is rather unique, as few other stocks in the market soar and plummet so considerably on a regular basis.
The recent increase was after KaloBios CEO, Martin Shkreli, tweeted on November 26: “I spoke with my counsel & advisers and decided to stop lending my $KBIO shares out until I better understand the advantages of doing so.”
The above tweet can mean one of two things:
- Mr. Shkreli plans to boost the stock to a pre-determined limit, after which he wishes to sell the shares
- He plans to develop KB003 (KaloBios’ well-known asthma medicine), and sell it at an uncharacteristically high price point—a strategy he used for the Daraprim drug.
Following the tweet, KBIO jumped more than 50% on Friday; however, this ascent appears to have caused investors to lose confidence in the stock. Mr. Shkreli’s ambiguous intention seems to have made many investors believe that perhaps KaloBios is not a worthy buy. This confusion among investors has caused KaloBios to dip in pre-market hours today and trade at $27.05.
