"Always be cautious before investing in a penny stock. While some will turn out to be explosive winners, like Advanced Micro Devices, others turn out to be expensive duds. That's because some penny stocks are scams, sometimes with limited company information. Many are vulnerable to manipulation for personal gain. Those that traded on the OTC, for example, "aren't required to meet the listing standards imposed by exchanges, such as a minimum share price, total market value or number of shareholders," according to FINRA.org."
"Down about 78%, or $1.23 on the day, IO Biotech ( NASDAQ: IOBT) doesn't look so healthy. For one, the US FDA just recommended against IOBT submitting a Biologics License Application for its cancer vaccine Cylembio based on data from the IOB-013 clinical trial. In addition, as noted by Investing.com, "The company said the FDA's recommendation follows trial results where Cylembio plus pembrolizumab improved progression-free survival in advanced melanoma patients but narrowly missed statistical significance.""
Penny stocks present high reward and high risk outcomes, with some delivering large gains and others proving to be scams or expensive failures. Many penny stocks offer limited company information and are vulnerable to manipulation for personal gain. Securities traded on the OTC are not required to meet exchange listing standards such as minimum share price, market value, or shareholder counts. Low-priced securities can be especially susceptible to pump-and-dump schemes that artificially inflate prices before rapid sell-offs. Investors must perform thorough due diligence. IO Biotech shares plunged roughly 78% after an FDA recommendation against submitting a Biologics License Application, a narrow trial miss, a downgrade, workforce cuts, and expected restructuring charges.
Read at 24/7 Wall St.
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