Aravive, Inc. (ARAV) stock gained in the after-hours following the announcement of new investment and executive changes in a press release. In the after-hours, the stock of ARAV is trading at $2.67 gaining more than 8.9% from the previously closed value. At the end of the last trading session, the stock closed at $2.45. The volume of the stock traded in the last trading session was around 115.8K shares.
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Reasons for the ARAV stock gain
There are a couple of reasons the stock of ARAV is gaining in the after-hours. On 3rd January 2021, Aravive, Inc. (ARAV) announced in a press release that the chairman of Aravive Fred Eshelman has agreed to buy a pre-funded warrant to purchase around 4.54 million common stock shares of the company. The purchase will be done through Eshelman Ventures, LLC. Per-share price is decided to be $2.20 which is a consolidated closing bid price of the common stock of Aravive as per NASDAQ rule. The deal is expected to be done on 5 January 2022.
Dr. Ehelman was already the owner of 18.2% or 3.8 million outstanding shares. The new investments by him will strengthen the balance sheet of Aravive, Inc. (ARAV). Due to that, the company will be able to continue its operations. The investment is around $10 million. In the past, he was appointed as the Executive Chairman of Aravive, Inc. (ARAV) and served as a non-executive chairman of BoD since 2020. In his new role, he will be continuing his work along with the CEO and top management of Aravive, Inc. (ARAV).
Effect on the stock gain
The new investment will help to carry out the operations in the pipeline. Also, it will improve the flexibility and liquidity of the company’s finances so that they could achieve several milestones in 2022. Investors are responding positively to the major development in the company’s balance sheet.
Conclusion
As a result of the major investment by their previous investor and current Executive Chairman, it shows a sign of the positive direction of the company. Investors are responding positively to the news. 2022 could prove a good year for Aravive, Inc. (ARAV) if they execute their plans to their full potential.
