Ontrak Inc. (NASDAQ: OTRK) is an AI player, working in the telehealth space. With a market capitalization of $18 million, this small company has seen extensive volume surges in the prior weeks. In this briefer, we go over the events and news stories impacting its rise and subsequent fall.
OTRK Direct Offering and Subsequent Price Surge
Ontrak saw a spectacular price surge at the onset of the month, shooting up from $0.64 to $0.70 in a three-day period. During this time, trade volume for the OTRK also saw explosive growth, shooting up from a mere 320,000 to 51.2 million. This had come about as a result of the announcement by the company announcing a registered direct offering at NASDAQ, with aggregate gross proceeds of $4 million. Considering that the amount represents 22% of the company’s market capitalization, the news understandably sent shockwaves across the market, resulting in a spectacular price rally. This was indicated in the explosive value surge during the same days.
Hype-dying down and a possible Ontrak fightback
As is the case with most speculative stocks, the OTRK price spike was momentary, with the stock falling back down to $0.66 by the 8th of June. Volume too fell down to 1.9 million, indicating the market losing interest and flocking elsewhere. The following days, however, so the signs of a possible fightback, with OTRK climbing back up 30% to $0.80. However, this too remains a struggle, given the news that analysts had just cut down the company’s revenue forecasts by 16%.
Conclusion
As is the case with most micro-capped tech companies, especially those emerging players in the AI realm, OTRK remains highly speculative. In order to emerge as a reliable business, the company is still in need of establishing a sustainable financial position that can see it push through into the foreseeable future.
