We Asked Retail What's Next For Phio Pharma After Monday's Blistering Rally: Most See More Room To Run

Around 34% foresee a pullback, while 13% are uncertain due to the stock's volatility.

Shares of Phio Pharmaceuticals Corp. (PHIO) nearly quadrupled on Monday after the biotech firm announced promising results from its Phase 1b trial for the cancer immunotherapy PH-762, designed to enhance the immune system's ability to target tumors.

However, the nanocap stock reversed course on Tuesday, plunging over 50% following news of a registered direct offering.

Phio revealed agreements to sell 1.1 million common shares at $3 each, with a concurrent private placement issuing short-term warrants to purchase 2.1 million shares at the same price. 

The combined transactions are expected to generate approximately $3.2 million in gross proceeds, earmarked for working capital and other corporate purposes.

Despite the sharp decline, retail investors remain optimistic, as evidenced by a Stocktwits poll where nearly 50% of over 900 participants believe the stock has "more room to run." 

Around 34% foresee a pullback, while 13% are uncertain due to the stock's volatility.

Retail sentiment on Stocktwits turned 'extremely bullish' on Tuesday, with many users predicting a post-offering rally fueled by Phio's low float and the potential of its drug pipeline. 

Some highlighted the company's ongoing trial progress, while others saw the price drop as a buying opportunity.

Like many early-stage biotech firms, Phio has yet to generate revenue. However, its latest financial report showed narrowed losses of $1.5 million for the quarter ended Sept. 30, compared to $2.8 million a year earlier. 

The company reported $5.4 million in cash, down from $8.4 million a year earlier but more than $4.7 million at the end of the previous quarter.

The stock has lost nearly 50% of its value over the past year but has seen retail interest soar. The number of new followers on Stocktwits jumped by over 9%, while message volume increased more than 1,600-fold.

With a short interest of 3.8% and ongoing developments in its PH-762 trial, retail investors remain laser-focused on updates about higher-dose concentrations and further enrollment milestones. 

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