- Goldman Sachs bought a 5.58% stake in a tiny Danish biotech firm that became a meme stock.
- It dropped below the 5% threshold the next day when the stock dropped from its meteoric rise.
- The Danish firm Orphazyme has been on a wild ride since June 10 when it rose 1,387% in a day.
- See more stories on Insider’s business page.
Goldman Sachs bought – then sold – a noteworthy stake in a tiny Danish biotech firm that became a meme stock last week.
Orphazyme, a Copenhagen, Denmark-based biotech firm, said the bank’s holdings increased to 5.58% of the company’s shares as of June 16. Then, just a day later, the bank’s stake fell below the 5% threshold that triggers a filing.
Orphazyme’s American Depository Shares rallied 61% on June 16 and then fell the following three days. The bank didn’t respond to Insider’s request for comment on the matter.
The stock has been on a wild ride since June 10 when it surged as much as 1,387% in a single trading day. The company rose to popularity on Reddit’s Wall Street Bets that day, though some retail traders questioned if the trade was a hedge-fund pump-and-dump.
In a statement about the share surge, the company said it wasn’t aware of any material changes to the business that would explain the stock move and warned investors they could lose money if the price dropped.
The price of the company’s American Depository Shares has surged then plummeted twice this month. Wednesday, the price was on the rise again, gaining as much as 53%.
The company, founded in Denmark in 2009, is researching and developing heat-shock proteins to treat people living with rare neurodegenerative diseases, according to its website. It went public in 2017. Orphazyme did not immediately respond to Insider’s request for comment.
Orphazyme isn’t the only small firm to be added to the meme-stock basket recently. This week, another small biotech firm, Atossa Therapeutics, saw a huge rally when retail traders poured into the stock, while a tiny Texas oil driller that’s previously warned it could go out of business also surged.
The meme-stock frenzy began earlier this year when investors mobilized on social media like Reddit caused GameStop’s share price to soar. Since then, many other stocks have been pulled into the frenzy.