Shares of Wellgistics Health, Inc. ( WGRX ) are trading lower after the company announced it entered into non-exclusive, non-binding letter of intent to evaluate a potential acquisition of Neuritek Therapeutics.

Wellgistics Health ( WGRX ) stock is taking a hit today. Why is WGRX stock dropping?

$105 Million Acquisition Would Expand Prescription Fulfillment Abilities

Despite the positive news, investors are concerned that the acquisition may not be enough to turn around the negative revenue growth Wellgistics experienced in the last year. Revenue fell about half between the last two quarters, going from $7 million to $3 million. The potential $105 million acquisition, even though it’s an all-stock transaction, is clearly not assuaging investors’ worries.

Part of the concern lies in how Neuritek Therapeutics is vastly different from Wellgistics’ current business. Wellgistics primarily produces a technology platform that works with pharmacy logistics, whereas Neuritek develops in-house treatments for conditions like PTSD.

Shares Fall Below Key Averages

WGRX is trading 35.4% below its 20-day SMA and 70.7% below its 100-day SMA, keeping both the short-term and intermediate trend pointed down. Shares are down 96.87% over the past 12 months and are positioned much closer to their 52-week low than their 52-week high.

The RSI is at 28.49, which is oversold and often signals selling pressure may be getting stretched. Meanwhile, MACD is at -0.0438, just below its signal line at -0.0432, indicating bearish momentum is still in control even as the stock looks oversold.

Shares Slip In Regular Hours

WGRX Price Action: Wellgistics shares are trading down 7.30% at $0.12 at the time of publication on Monday. The stock’s intraday range has seen a high of $0.13 and a low of $0.11. With a trading volume of 14.6 million shares, the stock is sitting 14.2% above its 52-week low. The RSI is at 28.5, pointing to oversold conditions.

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