(Bloomberg) – Two tiny biotechs, ISpecimen Inc. and Longeveron Inc., are the latest to see their stocks in a social media-fueled frenzy ahead of a U.S. trading holiday.
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ISpecimen closed 49% higher on Tuesday after more than doubling on open and triggering a volatility freeze. About 39 million shares have traded, according to Bloomberg, which is surprising for a stock with a float of less than 500,000 shares. The majority of the stock is held by individuals and approximately 44% is held by insiders.
These select companies’ gains were driven by a two-day decline in the Nasdaq Biotech Index, which closed at its lowest point since June.
Day traders are still hunting for electronic vehicle stocks like Rivian Automotive Inc. and Lucid Group Inc., as well as the big tech company Nvidia Corp. and Apple Inc. Monday added ISpecimen, which links human samples to researchers, and put Longeveron, a cell therapy company, on their watchlist, and stocks rose 80% and 181%, respectively, that day. Both closed on Monday at their highest level since their initial listing earlier this year.
Longeveron fell 39% on Tuesday, the largest drop since it was listed in February, and also triggered a volatility freeze. Still, the stock is up 72% this week.
The volatility was reminiscent of a Reddit call in February for a “#BioWar” against the hedge funds that bet on biotech stocks with low float. Short bets against Longeveron account for up to 14% of the float, or nearly $ 11 million, while the short position in ISpecimen is minimal at less than 1%, according to data from S3 Partners.
The two biotechs joined diagnostic company Progenity Inc. on Tuesday, as well as the EV and tech names as one of the most traded stocks on the Fidelity platform. Longeveron and Progenity came to AMC Entertainment Holdings Inc. were among the most mentioned companies in Stocktwits.
(Updates with closing prices.)
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