Venus Concept (VERO) shares gained nearly 460% on Jan. 16 after Madryn Asset Management disclosed a 91% ownership stake in the medical aesthetic technology company.
The announcement arrives shortly after Madryn discussed potential cost reduction strategies with Venus’s leadership, including the possibility of delisting the firm and deregistering its stock.
VERO stock, however, reversed those gains in morning trading on Tuesday, Jan. 20. At the time of writing, it’s trading at about $4.20 only versus its high of roughly $13 last Friday.
Should You Chase the Rally in Venus Stock?
The absence of fundamental operational improvements accompanying the ownership change raises questions about whether the rally represents genuine value recognition or temporary, momentum-driven speculation.
Chasing the Venus share price rally at the current, stretched levels presents unfavorable risk-reward dynamics, as the extraordinary percentage gains have already materialized and the stock exhibited immediate weakness following the initial surge.
VERO Shares Remain a Very High Risk Proposition
Investors are cautioned against buying VERO shares here also because the delisting consideration signals potential reduction in market accessibility and liquidity.
Moreover, historical patterns indicate that chasing rallies of such magnitude produces suboptimal risk-adjusted returns for disciplined investors.
These rallies often experience significant retracement as profit-taking begins and the initial catalyst becomes fully discounted into the stock price.
What’s also worth mentioning is that historically (over the past eight years), Venus has tanked over 4% on average in February, which makes its stock even less attractive to own in the near term.
Venus Does Not Receive Coverage From Wall Street
Another major red flag on Venus Concept shares is the absence of Wall Street coverage.
This means investors have minimal professional guidance on valuation and future prospects, leaving VERO’s stock price action entirely on the whims of sentiment and speculation.
This article was created with the support of automated content tools from our partners at Sigma.AI. Together, our financial data and AI solutions help us to deliver more informed market headline analysis to readers faster than ever.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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