(Bloomberg) — A battered Chinese company developing holographic technology caught the attention of the meme stock crowd. The price: a jump of 2,650%.
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MicroCloud Hologram Inc. rose to $41.53 on Thursday, up from a record low of $1.50 earlier this week, with more than $1.7 billion worth of shares trading after reports about the stock surfaced on platforms like Reddit’s WallStreetBets and StockTwits. Even with this eye-catching move, shares remained 67% lower than their January 2023 high, with a trading history that resembles the odds on a horse racetrack.
Shares rose as much as 131% on Thursday before paring gains to 23% at 10:21 a.m. in New York. The choppy trading led to at least six stops due to volatility.
The Beijing-based company went public in a blank-check merger that valued it at $450 million. After a wild debut, it managed to wipe out about 80% of its market capitalization in just a week. After completing a 1-for-10 reverse stock split on Friday, the shares traded above $1 again in an attempt to remain listed on the Nasdaq.
One thing to note about the stock’s hectic trading week, compared to one-time spikes in other retail traders’ targets, is that listed options don’t trade on the underlying stock. That means the meme crowd isn’t flipping short-term call options — a tactic that requires the stock to rise to get in the money.
While the fortunes made from day trading the stock stand out in a market that is long past the peak of meme stock mania, MicoCloud is still worth just $113 million, making it difficult for many Wall Street professionals to invest in trade their portfolios.
–With help from Carly Wanna.