Genprex Inc GNPX stock is up another 35 percent on Friday, bringing its five-day gain to a whopping 258 percent. At a price of nearly $16 per share, Genprex has more than tripled in value since its IPO just under one month ago. While Genprex investors certainly aren’t complaining, they may be wondering what’s driving the stock higher without any major news out from the company.
Genprex, according to its website, is a clinical-stage biopharmaceutical company developing targeted molecular therapies for cancer.
What Happened
The first factor that may be influencing the stock is the expiration of the analyst quiet period for Genprex coming up on May 8. On that date, the banks that helped underwrite Genprex’s IPO will be able to publicly comment on the stock for the first time, and IPO underwriters typically have good things to say about a stock.
In addition to the potential for positive headlines, Genprex has a tiny public float of shares, which can lead to extreme short-term volatility. Genprex has just 13 million outstanding shares, but only about 4.2 million of those shares are actively traded on the market. With a float as minuscule as 4.2 million, any meaningful buying activity can suck the liquidity out of the market, driving the stock’s price higher by leaps and bounds.
Why It's Important
This phenomenon isn't unique to Genprex. Check Cap Ltd CHEK surged 230 percent this week as well, and the stock’s 8.6 million float likely played a large role.
Other low-float stocks, including Longfin Corp LFIN, SemiLEDs Corporation LEDS, NetElement Inc NETE and Zosano Pharma Corp ZSAN have experienced similar extreme price swings in recent months.
What's Next
The Benzinga Newsdesk is always on the lookout for the next low float stock to take off. Traders who want to get in on the action can search the keyword “low float” in the Benzinga Pro Newsfeed to make sure they're among the first to see the next low-float stock to make a major move.
Genprex's stock was trading around $14.90 at time of publication.
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