Biotechnology firm Ayala Pharmaceuticals (NASDAQ:AYLA) is suddenly the center of attention among small-cap traders today. There’s really no significant news concerning the company itself. However, Ayala posted on Twitter (NYSE:TWTR) yesterday, and this may have sparked a short-squeeze rally in AYLA stock.
Sometimes, the short-squeeze mob doesn’t need much of a reason to bid up a particular stock. Just one tweet can do it. Today is a perfect example of this phenomenon in action as the squeeze crowd is suddenly targeting Ayala Pharmaceuticals.
They like to focus on small-cap companies, and Ayala fits that description with its $29 million market capitalization. Plus, it’s a relatively unknown company with a commendable mission: to advance treatments for rare tumors and aggressive cancers.
It’s hard to prove that AYLA stock is getting short-squeezed, but the company checks all of the typical boxes. There is a tweet from the company, though, which may have sparked interest in Ayala.
Why Is AYLA Stock Flying Today?
So, here’s what Ayala tweeted yesterday:
We are excited to announce the interim data from Part A of our Phase 2/3 RINGSIDE trial of AL102 in desmoid tumors, demonstrating initial substantial anti-tumor activity. AL102 was well tolerated among this patient population.
Along with that text, the company posted a link to a press release. It was a more detailed announcement of what was summarized in the tweet. Specifically, Ayala Pharmaceuticals revealed positive results from a Phase 2/3 clinical trial evaluating oral gamma-secretase inhibitor AL102 in patients with desmoid tumors.
The data, “although early,” demonstrates “initial substantial anti-tumor activity for AL102 as a single agent as measured by MRI scans,” according to Ayala Pharmaceuticals CEO Roni Mamluk. That’s great news — no doubt about it. However, this announcement is from July 5.
In other words, there’s really no new news here. Nevertheless, AYLA stock surged 130% as of 11:00 a.m. Eastern. At that time, the trading volume on the stock was over 61 million. On a typical trading day, it would be around 78,000.
Investors should stay tuned to see if there’s any actual, material news in the upcoming days from Ayala Pharmaceuticals. Meanwhile, the shareholders can enjoy their gains and the short sellers might want to avoid looking at the screen for a while.
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On the date of publication, David Moadel did not have (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.