Why Zomedica shares soared 72.4% this week
Shares of Zomedica Pharmaceuticals (NYSEMKT: ZOM) rose 72.4% this week, according to data from S&P Global Market Intelligence. The veterinary health diagnostics stock closed last week at $0.29, then opened Monday at $0.30, and didn’t see the stock surge until it hit a high of $0.4899 on Thursday. The stock’s 52-week high is $2.72 and its low is $0.27. Despite this week’s rally, the stock has fallen more than 81% in the past year.
Zomedica is not an investment for the faint of heart. With just $22,514 in Q3 revenue, this stock is speculative at best. However, as it ended last week near its 52-week low, it was seen by many investors as a cheap bet. Also keep in mind that as low as Zomedica is trading, it doesn’t take long to get a huge percentage gain, especially with only a market cap of $373.3 million.
For the most part, it seems like a Reddit and meme-driven race with very little real news behind it. The stock was the 25th most traded stock on the Robinhood Top 100 on Thursday. The company recently named Vice Chairman Adrian Lock, the former CEO of PulseVet, to head the company’s sales organization. But that was Tuesday, two days before Thursday’s push.
This isn’t the first time Zomedica has benefited from a meme-fueled buying frenzy. On February 8, 2021, the stock rose from $1.21 in one day to $2.91 only to fall back to $1.75 by the end of the month. Chances are this short squeeze won’t last long, leaving some investors a bit poorer for their troubles.
That’s not to say the healthcare business doesn’t have opportunities. Pet owners spent $31.4 billion on veterinary care in 2020, according to data from the American Pet Products Association. That figure is expected to reach $32.3 billion in 2021. It’s also too early to tell whether the company’s purchase of PulseVet for $70.9 million in October will pay off. PulseVet uses shockwave therapy to help animal wounds heal, to treat chronic pain, osteoarthritis and bone, tendon and ligament injuries. This is a technology that is already being used, with some success, on humans.
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