Retail Traders Jump Back Into Tiny Biotechs Ahead of Holiday
(Bloomberg) -- Two tiny biotechs, ISpecimen Inc. and Longeveron Inc., are the latest to see their stocks caught up in a social media-fueled frenzy ahead of a U.S. trading holiday.
ISpecimen closed 49% higher Tuesday after more than doubling at the open and triggering a volatility halt. About 39 million shares traded hands, surprising for a stock with a float of less than 500,000 shares, according to data compiled by Bloomberg. The stock is majority held by individuals and about 44% is held by insiders.
The gains in these select companies comes in the wake of a two-day slide in the Nasdaq Biotech Index, which closed at the lowest since June.
Day traders are still chasing after electronic vehicle stocks like Rivian Automotive Inc. and Lucid Group Inc. as well as big tech names Nvidia Corp. and Apple Inc. On Monday, they added ISpecimen, which connects human samples with researchers, and Longeveron, a cell therapy company, to their watch lists and the stocks soared 80% and 181%, respectively that day. Both closed Monday at the highest since their initial listings earlier this year.
Longeveron sank 39% on Tuesday, the biggest drop since its February listing, and also triggered a volatility halt. Still, the stock is up 72% this week.
The volatility was reminiscent of a February Reddit call for a “#BioWar” against the hedge funds that bet against low-float biotech stocks. Short bets against Longeveron rack up to about 14% of the float, or nearly $11 million, while the short position in ISpecimen is minimal at less than 1%, according to S3 Partners data.
The two biotechs joined diagnostic company Progenity Inc., as well as the EV and tech names, as among the most-traded stocks on Fidelity’s platform on Tuesday. Longeveron and Progenity joined AMC Entertainment Holdings Inc. were among the most-mentioned companies in Stocktwits.
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