Novavax (NASDAQ:NVAX) emerged as one of the stocks to have had a pretty eventful day on Thursday. On Wednesday, the company announced that the government of the United Kingdom reached an agreement to buy as many as 60 million doses of Novavax’s coronavirus vaccine. However, on Thursday, the stock declined in early trading before recovering considerably and ending the day with gains of 8%.
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Earlier this week, the stock markets in the United States had declined considerably but on Thursday, there was a strong rebound and that was possibly one of the main reasons why the Novavax stock managed to record gains.
That being said, it should be noted that the Novavax stock had declined on Thursday even when the wider market was recording gains. Hence, it could be argued that after the initial decline, investors believed that it was possible to pick up the stock at a discount following the U.K. deal.
The fact that many investors believed that the stock could be had at a discount possibly led to the upward trajectory on the stock and soon enough it started climbing. It should however be noted that although the Novavax stock did record significant gains on Thursday, the trading volume remained lower than the average volume.
While it is true that the day to day performance of a stock is an important factor, it is not such a big factor for a potential growth stock like Novavax. The deal with the U.K. government is a significant achievement for the company and could well prove to be a major growth opportunity.
Although the company did not reveal the financial details of the deal, it is likely that the deal for as many as 60 million doses is valued at around $1 billion. Hence, it is quite clear that the company’s future prospects have brightened considerably following the inking of the deal.
Novavax is conducting late-stage studies of the vaccine, NVX-CoV2373, in the U.K. in order to prove its safety and efficacy. The company aims to commence a similar study in the United States next month.
The company revealed the information with regards to the deal with the U.K. government in a regulatory disclosure on Wednesday. The disclosure had been made after the markets had closed.
Hence, the reaction to the news was seen in the markets on Thursday. Despite the initial stutter, the Novavax stock managed to make a strong comeback.
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