Warrant Watchlist 3/18

Markets are trading flat today as there is no big news on tariffs, and Boeing (BA) and Facebook (FB) are slumping.

Facebook is down on a note out of Needham and Co. analyst Laura Martin. In her note, she says she fears “negative network effects” may hurt the company. In plainer English, she fears what would be called the “all rats off a sinking ship” effect, as executives are leaving the company in increasing numbers.

Ms. Martin writes:

“A ‘negative network effect’ suggests that departures will continue, and since we believe that people are a key competitive advantage of FAANG companies, this implies accelerating value destruction until senior executive turnover ends,” Martin wrote in a note to clients. “We prefer to move to the sidelines until we see senior employee turnover stabilize.

Here are a few interesting warrants I’m looking at this week:

Bionano Genomics (BNGO, BNGOW)

Bionano closed higher Friday after beating Q4 sales estimates and closing a $41 million financing round. BNGO is a clinical stage biopharmaceuticals company developing agents for the detection and treatment of cancer.

CEO Erik Holmlin is to present at the ROTH Conference in California tomorrow, the 19th, at 11:30am Pacific time.

BNGOW is a five year warrant, expiring in September of 2023, and is exercisable at $6.125 for one share of BNGO. The warrants could heat up if Mr. Holmlin’s presentation is well received.

Cellectar Biosciences (CLRB, CLRBZ, CLRBW)

Cellectar has been trending higher recently after hitting a multi-year low Christmas Eve of last year. CLRB is another clinical stage biopharma developing targeted cancer treatment drugs.

The Z warrant, CLRBZ, is exercisable at $30.40, with ten warrants convertible into 1 share of common stock. The unusual conversion is due to the stock of CLRB doing a reverse 1:10 split twice in the past few years. This is a five year warrant expiring in April 2021.

The common will have to move substantially, but it could bolster the very low priced warrant.