22nd Century Group Stock Rockets 30% Premarket On Scoring $9.5M Insurance Payday, Retail Traders Pile In
The debt-free biotech firm says insurer payout closes the book on 2022 Oregon blaze, sparking hopes of a turnaround amid a brutal year.
Shares of biotech firm 22nd Century Group rose over 30% in premarket trading on Thursday after the company said it had settled claims related to a fire incident in 2022.
In November 2022, a 22nd Century Group facility in Grass Valley, Oregon, suffered a fire that injured several employees (non-life-threatening), halted production, and caused damage to the plant. What caused the first was not disclosed officially.
The company announced late Wednesday that it had reached an agreement to settle all claims related to the incident with a one-time payment of $9.5 million in cash from its insurers.
22nd Century sells reduced-nicotine VLN cigarettes and offers contract manufacturing of tobacco products.
If the premarket gains sustain in Thursday’s regular session, it would mark the stock’s best performance since May. The company had a market cap of $5.7 million as of Wednesday.
Last week, shares gained 12% in a single day after the company announced it had repaid its outstanding debt and secured new capital to expand its tobacco leaf inventory. The repayment and completion of a preferred stock offering resulted in an approximate $9.1 million increase in its net assets.
“Because the Company is now debt-free, this marks a major transition in the company as this is a shift from survival capital to growth capital,” said Larry Firestone in a statement on Thursday.
On Stocktwits, the retail sentiment for XXII jumped to ‘extremely bullish’ from ‘bullish’ the previous day.
“$XXII Under 5M market cap, and they’re getting $10M cash? Run this!” a user remarked.
Year-to-date, 22nd Century stock has lost nearly all of its value.
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