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PreMarket Prep Stock Of The Day: BioNTech

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PreMarket Prep Stock Of The Day: BioNTech

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

For those who don't have the time to tune in live or listen to the podcast, Benzinga will highlight one stock that merits further discussion. This analysis is not a buy or sell recommendation.

The stock market is a market of individual stocks. In other words, even in the worst market environment, there are some issues with amazing gains over the past week. One of the those issues is BioNTech (NASDAQ: BNTX).

What BioNTech Does 

With the fears around the coronavirus pandemic gripping investors worldwide, the most important thing for now is find a cure — or at least a vaccine. Several of the large pharmaceutical companies and many small and large biotech companies are working feverishly to accomplish this daunting task.

On many occasions, a large company with mega resources will team up with a smaller company and collaborate on a project. This happens to be with case with BioNtech, as it has partnered with Pfizer (NYSE: PFE) to develop a potential coronavirus vaccine.

Benzinga is covering every angle of how the coronavirus affects the financial world. For daily updates, sign up for our coronavirus newsletter.

When BioNTetch's Move Started

For the month of February, the issue was rangebound between $28.69 and $35,10, ending the month at the high tick for $35.10.

Investors had a chance to buy the issue at or below the February low when it bottomed on March 12 at $28, most likely due to the implosion in the broad market. On March 13, it rallied to close at $30.93 and has not looked back.

On Monday, the news began to hit the tape that BioNTech formed an alliance with Fosun Pharma. Fosun will invest $50 million for nearly 1.6 million shares to help with development and commercialization to advance the coronavirus vaccine candidate.

That propelled the issue from $30.93 and to $40 on heavy volume, which attracted the attention of momentum and algorithmic traders.

BioNTech's Rapid Price Acceleration

The move continued higher Tuesday when BioNTech shares catapulted from $40 to end Tuesday's session at $66.60 after peaking intraday at $76. The catalyst: the announcement of a collaboration with Pfizer to co-develop a potential COVID-19 vaccine.

The follow-through in Wednesday's wacky premarket session saw the issue peak at $110.20.

Some sanity has returned to the issue, as it was trading at $86.26 at the time of publication. This still represents a nearly 30% gain on the session and a nearly 200% gain since Monday. 

BioNTech Moving Forward

The old Wall Street adage that "bulls make money, bears make money" is quite appropriate for this issue and this market in general.

For the investors who were fortunate enough to purchase shares prior to the major run and for whom it has met their original price objectives, they may consider selling part of the position or at least a portion.

For those confident and content that the company will develop a vaccine that will be widely used — a development that may take some time — they can hold in the anticipation of much higher prices.

Keep in mind that if the company is unable to develop a vaccine or is beaten to the punch by another company, it very may well return to the area where it traded before the hysteria started. In BioNTech's case, that's the $31 level. 

Photo courtesy of BioNTech. 

 

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