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Monday, September 20, 2021

Shares of Obalon Therapeutics, Inc. (OBLN) rallied in Pre-Market. Why did it happen?

Obalon Therapeutics, Inc. (OBLN) is a medical device company that mainly treats people with obesity via its medical devices.OBLN stock price saw a jump of 34.18% to reach $4.75 in Wednesday’s pre-market as of this writing.OBLN stock price was up by 18% on the previous closing and still enjoying the bullish sentiment. Let’s understand the reason behind this bull.


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What’s happening?

There is no press release by the company, no earning report, no analyst upgrades, or targeted price to explain the rise of OBLN stock price. This is spreading curiosity among investors.

However, WeissLaw LLP reminded shareholders about its ongoing investigations against the board of directors of Obalon Therapeutics, Inc. along with ProSight Global, Inc. (NYSE: PROS) and Inphi Corporation (NASDAQ: IPHI) due to violation of laws in connection with the proposed merger of Obalon Therapeutics, Inc with ReShape Lifesciences Inc. (“ReShape”). According to the merger agreement, OBLN will be converted to ReShape Lifesciences Inc. as Reshape will buy OBLN in an all-stock transaction.

Obalon Therapeutics is expected to report its fourth-quarter earnings on March 11, 2021. The OBLN recorded eps of $-0.64 in the same quarter of the last year. The company generated $44,000 in the third quarter of 2020 as compared to 0.3 million in the third quarter of 2020. The decrease in the revenue was mainly due to the suspension of operation due to COVID-19 escalation.Net loss of $1.6 million was recorded in the third quarter of 2020 while the net loss per share was $0.20 as compared to $0.61 in the third quarter of 2019.

Research and development expenses reached $0.3 million while and general and administrative expenses were recorded at $1.3 million in the third quarter of 2020. Both of these were less as compared to 2019 due to delay in the company’s operations as the focus of the whole medical industry was shifted to COVID-19.

Conclusion:

The OBLN stock gained on Tuesday’s market and still going high in the pre-market. The company’s progress was low in 2020 due to the coronavirus pandemic but still OBLN stock can be a good bet for long-term investors.

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