One of today’s most impressive movers has been jewelry retailer Brilliant Earth (NASDAQ:BRLT). This morning, BRLT stock surged more than 35% higher on little news. With the stock still up around 16% at the time of this writing, Brilliant Earth is grabbing a lot of eyeballs today — and for good reason.
With few fundamental catalysts driving this move, speculation appears to be the culprit behind Brilliant Earth’s price action. That said, many may have thought that speculative forces were all but gone, given how the meme trade has done this year. Indeed, with the Federal Reserve tightening on monetary policy, there’s less speculative capital to go around. That certainly makes today’s movement intriguing for traders.
So, is there more juice left in this trade? Or is momentum likely to drive BRLT stock lower? Let’s dive in.
BRLT Stock Surges on Little News
Brilliant Earth seems to have little in the way of news right now, save for one update released approximately a week ago. Recently, the company filed a shelf offering.
Shelf offerings are essentially stock issuances in which stock can be released over time instead of all at once. Shares are held by the company “on the shelf” as treasury stock until their release. Typically, shelf offerings carry a three-year window, but companies usually issue the entirety of the stock well before the window expires.
For BRLT stock investors, perhaps there’s still some intrigue around this shelf offering. Companies usually don’t shelve an offering unless they think the stock price will rise in the future. Accordingly, perhaps some algorithmic traders and others playing momentum latched onto this news as a reason to start buying at any jump-in price. Time will tell, but for now, this rally seems like it will be short-lived.
On a year-to-date (YTD) basis, BRLT stock is still down more than 60%. That includes today’s move. Thus, for those looking to sell the rips, this is an intriguing stock to follow right now.
On the date of publication, Chris MacDonald 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.