What’s going on with T2 Biosystems (TTOO) stock?

T2 BioSystems (NASDAQ:TTOO) stock price rose by more than 23% on Tuesday amid a short-squeeze and as some investors bought the dip. The shares jumped to a high of $4.81, its highest point sice mid-November. Despite the jump, the stock has crashed by over 98% this year and is almost 100% below its all-time high.

Why did T2 Biosystems stock jump?

There was no news to explain the TTOO stock surge on Tuesday. A likely reason is that the stock rose because of the ongoing bull run in Wall Street. Key indices like the Dow Jones and the tech-heavy Nasdaq 100 rose to record highs on Tuesday. In most cases, many small-cap stocks tend to rise when the broader indices are in an uptrend.

The other likely reason is that the stock went through a short-squeeze. Besides, it is still a heavily-shorted stock, with over 7% of its outstanding shares being held by short-sellers. These squeezes have become relatively common now that the Federal Reserve has pointed that it will start cutting rates in 2024.

T2 Biosystems fundamentals are still weak. According to its most recent 10Q statement, its revenue continued crashing this year as demand for its Covid-19 products evaporated. Its quarterly revenues plunged from $3.6 million in Q3’22 to $1.47 million in Q3’23. Its nine-month revenue dropped to $5.5 million from $16.8 million.

Its losses also soared during the same periods. The quarterly net loss soared to more than $15 million. Therefore, these numbers mean that the company will likely continue deteriorating barring any major development.

Most importantly, T2 BioSystems will likely need more cash soon. It ended the quarter with over $24 million in cash. Most of these funds came from an equity raise through an ATM sale in the third-quarter. These funds will likely run out in 2024 if the company’s losses continue.

T2 Biosystems outlook is still dire. The management anticipated that its Q4 revenue will crash by over 60% to about $2.1 million. While it has received an FDA approval for its T2Biothreat Panel, it is unclear whether it will start monetizing it soon.

TTOO stock price forecast

TTTO chart by TradingView

The daily chart shows that the T2 Biosystems share price has moved sideways in the past few months. It has maintained in this range because of the lack of a clear catalyst. As a result, the shares are consolidating at the 50-day and 25-day moving averages. The Average Directional Index (ADX) has moved below 20, signaling that there is no trend.

Also, the Average True Range (ATR) has crashed, meaning that there is no volatility. Therefore, there is a likelihood that the stock will remain in this range in the coming months. The shares will have pumps and dumps because of short squeezes.

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