interesting take from a tipper

Who said there’s no insider trading in the market?
I had a bit of a laugh this morning when I got up to see the portfolio performance. Benitec Biopharma’s [ASX:BLT] share price was up 26.32%.
Wow, impressive. That pushed the overall gain back above 240%.
It’s one of those stocks where 240% is great, but it’s still far less than what we expect from a revolutionary technology company such as Benitec. But a daily jump of 26.32% is nothing to sneeze at.
I looked at the company website, no news releases. Interesting. I jumped onto Google News and searched for any news on Benitec, or ddRNAi...still nothing. Hmm.
The ASX website had what I expected to see, a speeding ticket for BLT. The ASX trying to figure out why the volume and price jumped so radically in one day. Here, surely I would find out something from BLT in response to the ASX price query.
Nope, still nothing.
So, with absolutely no news, no company announcement and no specific new breakthroughs or information over the weekend with ddRNAi, BLT launched 26.32% in a day.
That’s when I started laughing. For all intents and purposes, the ASX does a pretty good job of managing the market. But really, how does something like this happen on no news? Perhaps there’s more to this than we realise.
How could this even happen? You can expect this kind of behaviour from revolutionary tech stocks, but it’s usually on the back of news or a new product or breakthrough. Not on the back of nothing.
The first thing that comes to mind is that someone, somewhere has information the rest of the market doesn’t have. That’s one of the most obvious conclusions. But to shift the market 26%, it would have to be a big information leak. And you need a lot of investors acting all at once to move a market millions of dollars.
However, I don’t think it’s information coming from the company that’s made BLT jump so significantly. This could be investor driven.
This might be because of an article. It might be because of an unrelated company doing something that’s similar to BLT. Or it could be that a big investor has decided to buy a stake in the company — yesterday’s trading volume was nearly 10-times the daily average.
Who knows? But there’s one thing for certain: You’d hate to have missed the 26% jump. Some stocks can’t do that in a year, let alone an afternoon.
That’s why when it comes to our buy list of stocks, if there’s a stock you like, as long as you understand the risks, you should take the plunge. These stocks can move fast.
Still, it doesn’t explain the jump. Another possibility could be takeover rumours. There have always been murmurings since BLT presented their ddRNAi technology. And big pharmas like Pfizer, Merck and Alnylam have always sniffed around BLT.
In fact, BLT and Pfizer are even in partnership for the therapeutic use of ddRNAi technology.
The market in gene silencing is consolidating. And it’s happening quickly as big pharmas switch back on to the idea that switching off diseased genes is a breakthrough idea worth billions to them.
Roche, in particular, bought a DNA silencing company for a cool US$450 million only a few weeks ago. This comes after Alnylam bought an RNAi company in January. And to top it off, Oncotheyron also bought an RNAi company a couple of weeks ago.