What happened
Shares of small-cap satellite communications stock Globalstar (GSAT +6.41%) closed up 11.9% in Tuesday trading. There wasn't any news to explain the stock's rise, however -- no earnings, no press releases, no analyst upgrades, nor even a change in price target. So far as I can see, there was no ... nothing.
So what
And yet that's not terribly unusual for Globalstar stock. Although it's a sizable company (Globalstar's near-$600 million in market capitalization is actually more than rival Intelsat was valued at one year ago) and carrying a relatively modest debt load for this capital intensive industry (just $475 million, net of cash), Globalstar is cursed with an exceedingly tiny per-share price that makes its stock subject to violent swings on pretty much a daily basis.
Over the past month, for example, Globalstar stock experienced 5%-or-greater swings in stock price roughly every other day -- which seems overfrequent until you realize that all it takes to move Globalstar that much is a $0.02 wobble in stock price.
Image source: Getty Images.
Now what
Today's shift in stock price was a bit bigger than average -- five whole cents to be precise. Still, in the grand scheme of things, it too was but a wobble.
If you're considering investing in this penny stock, you'd better get used to such wobbles, though, because they happen more often than not -- and most often for no reason at all.
