Signify Premium Insight: Will Nanox Disrupt the X-ray Systems Market?

Background

With its share price falling from more than $66 to less than $24, September was a tumultuous month for Nanox.

On August 25^th, the medical imaging start-up closed its initial public offering, having raised $190m from the sale of 10,555,556 ordinary shares at a price of $18 each. Money poured in as investors were sold on Nanox’s cold cathode x-ray source and the subsequent reduction in costs that it would enable, as well as the vendor’s pay-per-scan pricing model that would let the company access new, untapped markets.

A week later the shares were being traded for almost double their opening amount, and by the 11^th of September they had reached a peak of $66.67. This meteoric rise soon came to an end though, as activist short-seller Andrew Left of Citron Research published a report comparing the Israeli start-up to disgraced medical testing firm Theranos and asserted that the company’s shares were worthless.

Other commentators added to Left’s criticism, causing investors to abandon the stock. Class action lawsuits followed, with legal firms hoping to defend shareholders against the imaging company’s alleged fabrication of commercial agreements and of misleading investors.

Nanox defended itself against the Citron attack, insisting that the allegations in the report are ‘completely without merit’, but the extra scrutiny and threat of legal repercussions has left the share price continuing to plummet, falling to $23.52 at month’s end.