Yesterday saw the U.S. market debut of Zentek (NASDAQ:ZTEK), a company that investors should be watching. Zentek uplisted to the Nasdaq on March 22. Since its initial public offering (IPO), the Canadian tech company has been trading well. Previously, it was listed on the TSX Venture Exchange and traded over-the-counter. If growth continues for ZTEK stock, though, it will be among the top breakouts in the first half of 2022. So far, momentum is certainly on its side.
This week began with Zentek announcing that its U.S. Securities and Exchange Commission (SEC) Form 40-F registration would be effective by the close of the day. That meant a thumbs up for its common stock to begin trading on the Nasdaq. Today, ZTEK stock skyrocketed by more than 200% in premarket trading.
Growth has slowed a bit since then, but the stock is still moving steadily into the green. As of this writing, Zentek is up more than 25% for the morning.
What’s Happening with ZTEK Stock?
Zentek is an unusual company that specializes in “intellectual property development and commercialization.” Due to its penny stock status, it will stay under Wall Street’s radar until surpassing the $5 mark. If it keeps rising, however, that may happen before the end of the week. Currently, the company’s market capitalization is roughly $335 million. So, while it may be small-cap play, it’s no micro cap. That may reassure some investors. This week, CEO Greg Fenton stated:
“Trading on the NASDAQ is an important milestone for Zentek, and reflective of our growth and transition to becoming a global technology company. This will be pivotal in generating additional interest and awareness in the U.S. investment community, is expected to enhance trading liquidity in our shares, and will provide us with greater exposure to institutional investors.”
Of course, because ZTEK stock is new to U.S. markets, there’s still a lot of uncertainty with the company. Plenty of stocks shoot up on IPO momentum. But staying in the green after a major surge isn’t as easy.
Zentek’s nanotechnology used to improve patient health and safety could have significant applications for the healthcare industry. The penny stock’s current surge, though, is likely driven more by social media buzz than true investor confidence. Investors on Twitter (NYSE:TWTR) are excited by its winning streak and interest is only increasing thus far.
What It Means
As of now, it’s too early to classify ZTEK stock as a meme stock. Sure, it has the markings of a play for Reddit’s r/WallStreetBets crowd, but it could also catch Wall Street’s attention if it keeps rising. Regardless, investors should certainly be watching ZTEK stock as time demonstrates its true growth potential — or lack thereof.
ZTEK will likely stabilize soon, but it could also keep climbing. There are several possible outcomes. More attention from either mainstream or contrarian investors will push the stock up. Shares will likely only fall if both groups lose interest.
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On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.