When Michael Burry, the man who famously bet against the housing market before the 2008 financial crash, makes a move, investors take notice.
His hedge fund, Scion Asset Management, acquired 633,959 shares of BioAtla (NASDAQ: BCAB) for $1.37 each during the second quarter, making 1.65% of his portfolio
BioAtla shares started to move upward, finishing Monday at $1.76 and rising 6.81% pre-market on Tuesday, October 1st, to $1.88, suggesting growing confidence in the company’s future, particularly with today’s announcement of its acceptance of an abstract for Oral Presentation at the Society for Melanoma Research 21st International Congress in New Orleans.
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With the stock currently trading around $1.88 after spiking todays spike, Burry is now up 37.2%, meaning this penny stock purchase has begun to catch the attention of many investors.
But, what makes this particular play interesting?
Why is Michael Burry interested?
As a contrarian investor, Burry has built a reputation for finding undervalued opportunities. BioAtla, which has seen a massive decline of over 90% since its peak in late 2020, fits the profile. While the stock has struggled, it’s clear that Burry sees potential in the company’s innovative pipeline.
BioAtla’s focus on antibody-based cancer therapies could be game-changing, particularly if their phase 2 programs show positive results. However, investing in a company at this stage is risky. Clinical trials can take time, and success is far from guaranteed. Still, the potential rewards are significant, and Burry’s bet suggests that he sees value where others don’t.
BioAtla stock potential
Burry’s fund, at around $52 million in assets, is relatively small compared to Wall Street’s giants. For a fund of this size, a penny stock like BioAtla can offer significant returns if things go well.
BioAtla’s current market cap stands at $78 million, meaning that even modest gains could make a big difference for Burry’s portfolio.
However, it’s essential to recognize the risks. The biotech sector is notoriously volatile, and clinical trials often take longer than expected, with uncertain outcomes. That said, for those willing to take on some risk, following in Burry’s footsteps could lead to significant upside if BioAtla’s CAB technology proves successful.
