Cue Health, a prominent diagnostic maker known for its early over-the-counter Covid-19 tests, has found itself under scrutiny after a shareholder published a letter calling for a review of potential strategic alternatives. In response, Cue Health experienced an 18% surge in its stock value, reaching 52 cents per share in afternoon trading. However, the company’s shares have seen a significant decrease of almost 75% throughout this year.
The shareholder, Tarsadia Investments, which claims to represent early investors in Cue Health, emphasized the company’s failure to adapt to the rapidly changing post-Covid reality. Tarsadia directly addressed the company’s board, urging them to initiate a strategic alternatives process, realign costs, and enhance the board itself.
Recent financial reports from Cue Health revealed that its cash reserves decreased to $128.6 million as of June 30, compared to $363.1 million from a year ago. It is worth noting that Cue Health currently holds no debt obligations. Furthermore, the company reported a quarterly loss of $83.9 million, or 55 cents per share, in contrast to the loss of $99.1 million, or 67 cents per share, during the same period last year.
As Cue Health faces mounting pressure from shareholders and strives to navigate the challenges posed by the ongoing pandemic, the company’s next moves will be vital in determining its future trajectory in the diagnostic industry.