TTOO - TTOO stock price outlook as big shareholder dumps shares

2023-09-26 13:12:51 ET

T2 Biosystems ( NASDAQ: TTOO ) stock price sell-off continued as the company continued facing numerous headwinds. The shares dropped to a low of $0.1884 on Tuesday, the lowest level since August 2nd. It has dropped by more than 70% from its highest point in August and by almost 100% from its all-time high.

T2 Biosystems is facing numerous challenges. For one, CR Group, one of its biggest shareholders has been dumping its stock at a big loss. The company sold shares worth over $1.9 million by September 21. Before that, the firm disposed stock worth $3.8 million, meaning that it is giving up on TTOO.

The biggest challenge for T2 Biosystems is that its business is not generating enough revenue while its losses have continued rising. Its net loss in 2022 came in at over $62 million. Its net loss in the last quarter was over $6.3 million against revenues of just $2 million.

At the same time, the company is running low of cash. It had over $16.1 million in cash and equivalents in the last quarter and over $50.6 million in short-term borrowings. Therefore, with interest rates sitting at the highest level in decades, it is hard to make the case for investing in TTOO shares.

A likely solution for T2 Biosystems would be to sell its sepsis product to other large companies. For one, it has a genuine product, which is the only FDA-cleared product that detects sepsis-causing pathogens directly from blood in 3-5 hours.

So, what next for the TTOO stock price? With interest rates and bond yields rising, I believe that demand for the stock will be weak for a while. Therefore, I suspect that the shares will remain at the current levels in the near term. I also expect some volatility since it is effectively a penny stock.

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