Since the start of the year Wall Street analysts and veterans have looked on bemused as a frenzy of retail trading has pumped up a string of so-called meme stocks.
But the bafflement grew further today after shares in a small Danish biotech firm surged almost 1,400 per cent.
Orphazyme said it did not know what had prompted the extreme volatility in price and trading volume for its US-listed shares.
“The company is not aware of any material change in its clinical development programs, financial condition or results of operations that would explain such price volatility or trading volume that has occurred since June 10, 2021,” it said in a statement.
It warned that investors who bought its shares “may lose a significant portion of their investments if the price of such securities subsequently declines”.
While the company was unable to explain the sudden surge, analysts suggested it had become Denmark’s own meme stock.
“It’s not just GameStop and AMC that are the subjects of strange, sudden and inexplicable” price movements,” said Per Hansen at Nordnet in a note seen by Bloomberg.
“Sometimes, there’s no logical explanation for what happens on the stock market,” he said. “And the development in the share price of Orphazyme is an example of that.”
Orphazyme’s American Depositary Shares surged as much as 1,387 per cent yesterday, before closing up 302 per cent. Its Danish shares rose more than 136 per cent today.
The Copenhagen-based biotech firm specialises in heat shock protein response for the treatment of rare diseases.
Other popular meme stocks backed by armchair traders include cinema chain AMC and retailer GameStop, both of which have seen a resurgence in volatility in the last week.