It's not just brick-and-mortar gaming businesses and movie theaters that are bearing the brunt of short attacks from hedge funds. Biotech companies are, too. That's what led to BioCryst Pharmaceuticals, Inc. stock (among others in the sector) reaching new heights.
BioCryst focuses on oral prescription manufacturing for rare diseases such as Fibrodysplasia Ossificans Progressiva (FOP). Recently, they've also been developing a COVID-19 experimental therapy. Trading under "BCRX" on the Nasdaq Exchange, their stock has been on the up and up since December—with waves rolling in bigger and bigger.
The Wallstreetbets biowar has its eyes on BioCryst
BioCryst stock hit $6.10 on Dec. 4, 2020, the highest the company's public shares had run since 2019. At this point, however, the momentum was just beginning. By Jan. 20, 2021, the stock was up to $9.24 per share. Come Feb. 1, that number had hit $11.85. That's an overnight rise of 39.08 percent to complement a two-month boost of 143.33 percent.
So what's with the enthusiasm? It's none other than the subreddit WallStreetBets, of course. One post on the forum referred to BioCryst as the most undervalued stock across the market. Following the sentiment, other users shared posts referring to a biowar of sorts. It's just another form of the attack on hedge funds who are shorting companies and potentially attempting to manipulate market prices.
The short interest for BCRX
BioCryst is just one example of a biotech company that's putting it all on the line for clinical trials. Funds and firms bent on short attacks target these companies because of their consistent lack of revenue. In an enlightened era for retail or small-scale investors, the biotech sector is the perfect place to launch yet another war on Wall Street (hence the biowar sobriquet).
Will the biowar momentum keep on rolling?
On Feb. 2, the BioCryst stock trading volume soared above 18 million. This is meager compared to last week's measurements that were about twice that much. Nonetheless, it's much higher than the stock's average trading volume of 7.4 million.
Rallies in response to Wall Street short bets have been waning this week overall, but that doesn't mean the momentum is sputtering out. The weeks ahead will tell us a lot about the retail investor influence in the modern era. Melvin Capital already lost 53 percent of their assets under management over the course of January thanks to their short bets on wildly viral stocks like GameStop. This likely won't put out the fire of billionaire influence—a marked concern of Wallstreetbets users—but rather redirect it so the flames can catch elsewhere.
There are plenty of market influencers on the side of BioCryst and biotech as a whole. Cathie Wood's ARK exchange-traded funds (especially ARKG, a gene-focused basket) are evidence, and they're only growing in popularity.
With all this in mind, I wouldn't be surprised to see the biowar roll forth, perhaps with more longevity than the fight against AMC and GameStop short sellers. In the end, I suppose, the goal is the same: deplatform the suits.