Generex Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Generex Biotechnology (Nasdaq: GNBT  ) slid more than 10% in intraday trading as investors weighed the upcoming vote on a reverse stock split.

So what: It's been a wild week already for Generex with a huge price swing to kick off the week. And with the company's special meeting scheduled for tomorrow, it could be yet another volatile day for the stock. Ahead of that meeting, investors are likely grappling with the effect that the proposed reverse stock split would have on both the company and the equity shares.

Now what: The vote on the split proposal will be pretty significant for Generex. A "yes" vote would allow the company to keep its shares listed on the Nasdaq and make it easier for the company to raise money to support its commercialization efforts. Investors, however, are no doubt considering the share dilution that is ahead if the proposal is approved -- the company already announced earlier this week that if the reverse split gets the thumbs-up it would go to market with a rights offering of at least $25 million.

Interested in more info on Generex? Add it to your watchlist by clicking here.

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Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his Motley Fool CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.


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