The Motley Fool

Why the Cynata share price crashed 15% lower today

The Cynata Therapeutics Ltd (ASX: CYP) share price has come under pressure on Thursday.

Its shares were down as much as 15% at one stage before rebounding slightly.

Unfortunately, this sizeable decline has wiped out the majority of Cynata’s gains in 2019.

Why did the Cynata share price crash lower today?

Investors have been hitting the sell button today after the clinical-stage biotechnology company provided an update on its takeover discussions with Sumitomo Dainippon Pharma Co.

In June Sumitomo made an indicative, non-binding and conditional proposal of $2.00 per share in cash for Cynata.

However, according to today’s update, Cynata has been unable to reach an agreement on terms to its satisfaction. As a result, the two parties have now withdrawn from takeover discussions.

Considering Cynata’s shares were trading at $1.48 as of yesterday’s close, some 26% lower than the proposed takeover offer, it appears as though many investors weren’t convinced a deal would be made. So this news may not have come as a big surprise.

What now?

Management advised that it will continue to focus on progressing its Phase 2 clinical trial programs in osteoarthritis and critical limb ischemia, and in graft-versus-host disease with partner Fujifilm.

Furthermore, it is actively engaged in commercial discussions with parties that are interested in partnering with the company to develop its unique Cymerus therapeutic mesenchymal stem cell (MSC) technology.

Elsewhere on the market today, the WiseTech Global Ltd (ASX: WTC) share price has also fallen heavily. Its shares were down over 10% before being placed in a trading halt following a short seller attack.

And the Zip Co Ltd (ASX: Z1P) share price has also fallen 10% due to profit taking and a bearish note out of UBS. It has concerns over how credit-worthy buy now pay later users are. The broker also took aim at Afterpay Touch Group Ltd (ASX: APT) as well, suggesting its shares could drop as low as $17.25.

NEW. The Motley Fool AU Releases Five Cheap and Good Stocks to Buy for 2020 and beyond!

Our experts here at The Motley Fool Australia have just released a fantastic report, detailing 5 dirt cheap shares that you can buy in 2020.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading over 40% off its high, all while offering a fully franked dividend yield over 3%...

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click here or the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.


James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, WiseTech Global, and ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.