The Incannex (ASX:IHL) share price has lost 20% in 4 weeks. What's happening?

Incannex shares recently reversed their upward momentum. Read on for more details.

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The Incannex Healthcare Ltd (ASX: IHL) share price has taken a beating over the past four weeks, having come off its all-time high of 44.5 cents on 2 September.

Prior to this, Incannex shares rallied from mid-August until this point. So, what's happened to reverse the climb for this medicinal cannabis company?

Read on for more details.

What's up with the Incannex share price lately?

The Incannex share price soared in August after the company advised it had filed an F-1 Registration form with the US Securities and Exchange Commission (SEC).

An F-1 registration is like an initial public offering (IPO) on the ASX, except it is reserved for companies domiciled outside of the US.

The key difference is that F-1 applicants complete a US public offering of American Depositary Shares (ADS) instead.

Each ADS represents 50 Incannex shares and trades on the American exchanges just like any ordinary share would.

Incannex shares jumped from 27.5 cents on the day of the announcement to an all-time high a few weeks later. 

But Incannex shares cooled off as September began, coinciding with the time it released its FY21 earnings results.  

In its report, the company recognised a 214% year over year increase in revenue, but this didn't carry through to its net profit after tax (NPAT).

In fact, the company recorded an almost 74% loss from ordinary activities that mushroomed to $8.2 million. As such, the company's net loss for the year ballooned 82% deeper into the red from FY20.

Investors weren't impressed by the healthcare company's results at all. In the days following the release, the Incannex share price started its march south.

So, it appears that investor sentiment has shifted for Incannex as selling pressures mount on its share price.

Share price snapshot

At the time of writing, Incannex is trading at 35 cents, down 2.82% today. That's also a 21% loss over 4 weeks.

On a longer-term view, the Incannex share price has been a major outperformer over the past year to date, climbing 130% into the green.

That builds to a 331% return over the past 12 months for Incannex shareholders. This is well ahead of the 25% gains recorded by the S&P/ASX 200 Index (ASX: XJO) over the past year.

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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