Here's How Readers Can Pull In A Quick 35% On Delcath Systems, Inc. (NASDAQ:DCTH)

For the majority of our readers here at Insider Financial, Delcath Systems, Inc. (NASDAQ:DCTH) is a stock that needs no introduction. The biotech company lit up the small cap tape earlier this year when it spiked early June on the back of shareholders voting down a reverse split. It's also one that we've covered on numerous occasions over the past twelve months and one that – despite the spike we just mentioned – we have felt remains undervalued when considered against a backdrop of its fundamental operational development.Since the start of August, we've seen action that looks to be serving as an initial validation of this claim. The company was trading at $0.06 a share back on August 2. At market close on Wednesday, this had risen to $0.14 a piece – a 133% gain across the period.Throughout August so far, we've not seen much in the way of news or press releases on which we can pin the upside run. The company put out second quarter financials back on August 8 and served up something of an operational update (as is standard) alongside the financials, but the numbers weren't anything too far outside of what was expected and the business update didn’t include anything game changing. As far as the numbers are concerned, revenue for the second quarter of 2017 increased 20% to $0.6 million from $0.5 million in the prior-year quarter, while revenue for the first six months of 2017 increased 44% to $1.3 million from $0.9 million in the prior-year period.There remains a considerable reverse split risk, despite the above mentioned shareholder vote that served to delay the split (shareholders voted it off the table but in actuality all the vote served to do was delay the inevitable) and the company's lead development program, which we've covered on numerous occasions in detail here, here and here, hasn’t made any great strides towards a resolution, successful or otherwise.So this begs the question, what's behind the appreciation? Further, can we rest on any driver that allows us to put forward some expectations for what's likely to happen near term and – by proxy – can we justify taking a position in the stock at current prices?The simple answer to that second question is yes – whatever's happening short term, we still feel there's plenty of value in Delcath's development program and as soon as the company can get on top of its capital structure issues markets are going to start focusing on said potential and loading up ahead of any potential commercialization.Looking at the first question, there seems to be an equally simple answer.Take a look at this filing.It's an August 8 exhibit that outlines the company's financials, as we referenced above. As part of the highlights section in the filing, Delcath points out that it was able to raise $2 million during the quarter through a series B preferred issue and that – and this is the important part – that the preferred shares are convertible into common shares at $0.153 per share.It seems, then, that the run up that we’ve seen over the last few weeks is appreciation based purely on markets driving the company towards this conversion price. As mentioned above, Wednesday's close saw Delcath trade for $0.14 a share, giving the company a 36% appreciation on the daily session. After hours, however, markets pushed the company back down to the tune of 20% and Delcath will open the session on Thursday at $0.113.There's a short term trade available here, then. If the above assumption is correct, that the company is trading up towards conversion price, then it stands to reason that Delcath will continue to rise until it reaches $0.153. At current prices ($0.113) that means there's a quick turnaround 35% to play for.It's not a risk-free play as it's very much rooted in speculative assumption, but for a trader looking to take a punt, it might be a smart move.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on DCTH, sign up below!Image courtesy of William Creswell via FlickrDisclosure: We have no position in DCTH and have not been compensated for this article.