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Obalon Therapeutics Inc. (OBLN) stock soared in the recent premarket trading session. here’s why

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Obalon Therapeutics Inc. (OBLN) shares rose by 11.42% to trade at $3.22 in premarket at the time of writing. OBLN’s stock lost -2.36% on Friday’s session as it closed at $2.89. The volume traded is 0.54 million shares, which was lower than the average daily volume of 1.08 million shares within the past 50 days. OBLN shares have risen by 319.27% over the last 12 months, and they have moved down by -2.69% in the past week.

What is recently happening in the company?

On 20th March 2021, reminded OBLN shareholders that it has an ongoing investigation into Obalon Therapeutics Inc. and thus encourage them to discuss this investigation with the firm to know their rights. Here’s why the investigation is taking place.

On 20th January 2021, Obalon Therapeutics Inc. announced an agreement to merge with another weight loss company by the name of ReShapeLifesciences Inc. The news caused OBLN stock to soar by six-hold in volume trading and rose by 503.4% in price.

This news had a positive effect on the stock and operational performance however the news also came with its fair share of investigations asking about the nature and details of this agreement. On 21st January 2021, a law-firm called WeissLaw LLP announced that it was starting an investigation in the possible breaches of fiduciary duty and other violations of law by Board of Directors in Obalon Therapeutics Inc.

The possible breaches include if whether the company acted in the best interest of Obalon’s public shareholders when deciding for this proposed merger and if so does the merger agreement sufficiently compensates the shareholders of Obalon.

ReShapeLifesciences Inc. will acquire Obalon. The all-stock transaction is pertinent to OBLN stock to change its name to ReShapeLifeSciences, Inc. and the ticker will be changed “RSLS” traded under NASDAQ. The merger acquisition after completion will let ReShape stakeholders to own 51% approximately while Obalon stockholders will own 49% of the combined stock.

Obalon’s weight-loss medical device- Oballon Balloon System

The core medical product of the company is a device by the name of Obalon Balloon System. This system is designed specifically to provide treatment in the form of weight loss for patients having obesity problem. The functioning of the Obalon Balloon System is such that it is administered through a capsule that can be orally taken. The capsule contains an inflatable balloon that is attached to a microcatheter. Obalon Therapeutics Inc. has its own microcatheter by the name of Obalon Touch Inflation Dispenser. The inflation is done semi-automatically with a hand-held inflation device that inflates the balloon as it is placed. The microcatheter traces and displays the location on the balloon to guide its inflation which is done through a canister of mixed gases.

This process is a reversible and repeatable weight loss solution which does not require any invasive surgery or alteration in the anatomy of the patient. It is usually recommended by physicians.

Obalon’s background

Obalon Therapeutics, Inc. is a technology company which is specifically based on a vertically integrated medical technology structure. It was founded in 2008 and the HQ is established in Carlsbad, California. The Company focuses on the development and commercialization of medical devices that are differentiated for treating people with weight problems and obesity. The company had three retail treatment centers in California, as of 27th February 2020.

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