Generation Bio on Tuesday said that it is evaluating strategic alternatives to maximize the value of its assets for shareholders and implementing a strategic restructuring expected to result in a 90% reduction in workforce.
Wedbush analyst David Nierengarten on Wednesday downgraded Generation Bio (GBIO) to ‘Neutral’ from ‘Outperform’ with a $7 price target after the company announced a strategic restructuring. Shares of the firm traded over 31% higher in Tuesday’s pre-market session.
Generation Bio on Tuesday announced that it is evaluating strategic alternatives to maximize the value of its assets for shareholders. The company indicated that options include an acquisition, merger, business combination, sale of assets, or other strategic transactions, while noting that there is no assurance of the exploration resulting in a transaction. The company also said it is implementing a strategic restructuring in the meantime, expected to result in about 90% workforce reduction by the end of October.
Based on the indefinite postponement of lead candidate selection and development plans, Wedbush said it is moving to the sidelines as the company seeks strategic alternatives.
On Stocktwits, retail sentiment around GBIO jumped from ‘bearish’ to ‘extremely bullish’ territory over the past 24 hours, while message volume rose from ‘extremely low’ to ‘extremely high’ levels. According to Stocktwits data, retail chatter around the stock rose 4,850% over the past 24 hours.
A Stocktwits user expressed optimism on the stock’s value following the announcement.
Another opined that they expect a massive sell-off on Wednesday after the earnings announcement.
Generation Bio on Tuesday reported second-quarter revenue of $765,000, down from the $4.09 million reported in the corresponding quarter of 2024, and below an analyst estimate of $2.51 million. Diluted loss per share came in at $3.12, versus an estimated loss of $2.85 per share.
The company ended the quarter with cash, cash equivalents, and marketable securities of $141.4 million.
GBOP stock is down by 62% this year and by about 84% over the past 12 months.
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