A company that nobody’s heard of and doesn’t make any money is up 56,000% this year
A 38-to-1 stock split sparked a rally for Regencell, but other factors are likely at play.
Regencell Bioscience, a Hong Kong-based herbal medicine company that generates no revenue, has skyrocketed in value amid a rally triggered by a 38-for-1 stock split.
The company, still in its research and development phase, is developing herbal medicine treatments for ADHD and autism. So far it has only bled money and generated none. It’s up about 700% in the past month and more than 56,000% this year, as of Tuesday afternoon.
The company’s 38-for-1 split took effect on June 13, pushing the stock higher. While stock splits often trigger rallies, it’s unclear why the company has shot up as much as it has.
A couple factors likely at play: the company has very low float, at about 6%, with 93.8% insider ownership, which means there are fewer shares available to purchase.
Its short interest as a percentage of float is 94.81%, suggesting somebody is getting squeezed. When that happens, short sellers often rush to buy back their shares, creating demand, which pushes up the share price.
While short sellers might be scrambling, Regencell’s CEO, Yat-Gai Au, has amassed a $26 billion fortune, Bloomberg reports.
