Retail Traders Jump Back Into Tiny Biotechs Ahead of Holiday

(Bloomberg) -- Two tiny biotechs, ISpecimen Inc. and Longeveron Inc., are the latest to see their stocks more than double in a social media-fueled frenzy ahead of a U.S. trading holiday. 

ISpecimen more than doubled at the open on Tuesday, triggering a volatility halt. It was trading up 53% at 10 a.m. Almost 18 million shares traded hands, surprising for a stock with a float of less than 500,000 shares, according to data compiled by Bloomberg. The stock is majority held by individuals and about 44% is held by insiders.

The gains in these select companies comes in the wake of a slide in the Nasdaq Biotech Index, which closed Monday at the lowest since June. The gauge continued to test five-month lows in Tuesday’s trading.

Day traders are still chasing after electronic vehicle stocks like Rivian Automotive Inc. and Lucid Group Inc. as well as big tech names Nvidia Corp. and Apple Inc. On Monday, they added ISpecimen, which connects human samples with researchers, and Longeveron, a cell therapy company, to their watch lists and the stocks soared 80% and 181%, respectively that day. Both closed at the highest since their initial listings earlier this year.

Longeveron fell 24% on Tuesday and also triggered a volatility halt. The volatility was reminiscent of a February Reddit call for a “#BioWar” against the hedge funds that bet against low-float biotech stocks. Short bets against Longeveron rack up to about 14% of the float, or nearly $11 million, while the short position in ISpecimen is minimal at less than 1%, according to S3 Partners data.

The two biotechs topped diagnostic company Progenity Inc., as well as the EV and tech names, as the most-traded stocks on Fidelity’s platform on Tuesday. Longeveron and Progenity joined AMC Entertainment Holdings Inc. among the most-mentioned companies in Stocktwits over the past 24 hours. 

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