- Helius Medical stock has jumped 200% today
- There's no obvious news to explain why
- Trading positions should try to determine that why before being fixed
Helius Medical Technologies (NASDAQ: HSDT) stock has jumped 200% and change premarket this morning, There's no obvious news to explain this price jump so it's worth having a look to see what is going on. For only if we know why the HSDT stock price has moved can we gain an idea of what to do about it.
Given the lack of direct news there needs to be a process of elimination. So, our first port of call is actually NASDAQ itself, where we can see the actual trade numbers. Like this:
From that we can see that this is a real price change. This isn't some fat finger mistake, or the one rogue trade in light traffic that then changes the ticker. People are indeed buying and selling at this new and higher price. That doesn't tell us whether this higher price is going to be maintained or not but it does tell us that the HSDT stock price jump is in fact real.
As to what Helius actually does it's a neurotechnology company. Specialising in non-invasive techs for neurological disease or trauma. It's also tiny, market cap is around the $3 million level. Perhaps more to the point from the investor view the stock is down 95% over the past year, so that 200% jump is welcome but not exactly a solution.
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As might be imagined from that Helius Medical stock price performance the company isn't doing well. It might do better, that's true, but the operating business isn't surging forward shall we say. It's also in need of more capital and it's that which might well be producing the excitement in HSDT stock. For Helius has filed with the SEC to issue more stock and warrant combinations in order to raise that capital. But we don't as yet know what the actual terms are. Don't know the number to be issued nor the price. Speculation about what those might be could explain the startling price movement. Or even, the idea that there might be a trade buyer, a strategic investor perhaps.
There's also another problem which is that Helius has been below the NASDAQ minimum price bid for a bit now and this new issue might not help with that. So we might expect some move – a reverse stock split possibly – at some point to try to deal with that.
Our problem with knowing how to trade this price move is that we still don't know what is causing it. We can see that volume of trade in it has jumped, it was over 800k shares yesterday. We can see that there are interesting things happening, the stock issue for example. But the precise cause of the Helius stock price jump is as yet unknown. And until we do know it's very difficult to get on the right side of the price movements. It could just be some momentum trade, could be real and important information – trading positions should perhaps be determined after working out what is happening here.