Stocks are rebounding nicely today as investors re-assess the pain seen in recent days. From regional banking stocks to mega-cap giants like Apple (NASDAQ:AAPL) that just reported earnings, there’s a lot to like in the market in today’s session. However, micro-cap stocks aren’t being left out of the mix, with shares of Minim (NASDAQ:MINM) stock surging more than 130% at the time of writing.
This move comes on little news, suggesting speculators are once again targeting low-float stocks. With a float of only approximately 1 million shares and a market capitalization under $20 million (after today’s impressive move), MINM stock appears to be the latest speculation-driven name investors are watching.
We’ve seen some impressive moves in such stocks in recent days. However, investors may be rightly concerned about the strength of these rallies in various micro-cap stocks, considering our uncertain environment.
Let’s dive into what to make of today’s move.
What to Make of the Incredible Move in MINM Stock
Today’s incredible surge in MINM stock is indicative of other moves we’ve seen across the small- and micro-cap space in recent weeks. The company’s low float of approximately 1 million shares doesn’t provide much supply, and when a surge in demand takes place, as we’ve seen today, some outsized upside can be seen by speculators.
Approximately 21 million shares have traded hands at the time of writing. Accordingly, for a company with an average daily trading volume of roughly 550,000 shares, that kind of volume surge is likely to lead to some near-term outperformance.
If a given company’s outstanding shares are limited, and suddenly everyone wants in, these kinds of moves can happen. That said, the technical nature of the move is concerning. There’s little in the way of fundamental catalysts driving the boat. Thus, when the tide turns, it often does so in a vicious way.
This will certainly be a stock speculators will want to handle with a short leash. Personally, it’s too speculative for my blood. However, judging by today’s price action, I can see why investors can opt for such momentum-driven moves.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Chris MacDonald 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.
