Tempest Adopts Limited Duration Stockholder Rights Plan
Unfortunately, Tempest, like many other biotechnology companies, continues to experience a significant and ongoing dislocation in the trading price of its common stock.
When it comes to small-cap stocks, or in this case, micro-cap and low-float stock, several factors lend a helping hand to a stock surge.
While the market capitalization of TPST was over $100 million at one point, as the stock rocketed 4000% higher, the stock had a modest market cap of about $5 million before the move.
This micro-cap starting point had positioned the stock to achieve significant percent returns should volume anda catalyst enter the frame.
The biggest contributing factor to the enormous surge was the stock float size relative to the volume traded.
The stock is estimated to have a public float of 12.5 million shares, having grown post-dilution.
On day one of the breakout in volume and price, the stock traded over 170 million shares.
This influx in volume created an enormous supply and demand imbalance, as the float was likely significantly smaller than 12.5 million shares at that point.
So, with a lack of supply and a surge in demand, it appeared the stock had nowhere to go but higher on the day.
The final leading factor that contributed to the surge higher is intraday shorts. Intraday shorts threw gasoline on the fire.
The supply and demand imbalance existed even without the involvement of short sellers.
However, with a wide availability of locates reported for TPST at a reasonably low price, $0.17 retail short sellers contributed significantly to the imbalance, resulting in a remarkable squeeze higher.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.