What happened
Shares of Sorrento Therapeutics (NASDAQ: SRNE) fell on Wednesday after the biopharmaceutical company fired its chief financial officer. By the end of the trade, Sorrento’s stock was down 9.9%.
So what
After the market closed on Tuesday, Sorrento revealed in a submission to a Securities and Exchange Commission (SEC) that it had terminated the employment of CFO Jiong Shao, immediately effective.
Sorrento Therapeutics Scholarship went down on Monday, following the news that it had fired an old member of its management team. Image Source: Getty Images.
Sorrento said Najjam Asghar, who has served as the biotech company’s chief accounting officer since June 2019, would replace Shao as CFO until a long-term successor is found.
Well what
Experienced investors know that it is rarely a good thing when a company fires its chief financial officer. Such a move often means that the CEO and the board of directors are not happy with the company’s decision – making because it relates to important financial matters – and it can be a sign of mixed problems that have not yet reached shareholders. are public. Many of Sorrento’s investors apparently decided to sell their shares today instead of waiting for any bad news to be announced.
Moreover, a large number of people are betting against Sorrento’s share. Roughly 20% of the biotech’s shares are sold short, which essentially means that these investors have taken positions that will benefit when Sorrento’s share price decreases. News of turnover in the company’s top leadership may have given these short sellers a reason to increase their bearish bets against Sorrento, which could have put extra downward pressure on the share price on Wednesday.
