What happened

Shares of Phunware (NASDAQ:PHUN) skyrocketed 70% higher on Thursday and kept on climbing on Friday, trading 14.3% higher at 10:07 a.m. EDT. All told, the stock nearly doubled in value over two days -- based on something that actually took place on Tuesday.

So what

On Tuesday Phunware was awarded U.S. patent number 10,254,378 for a method of tracking the location of a mobile device based on the strength of Wi-Fi and Bluetooth signals. The method has several ways to account for walls and pieces of furniture, its purpose being to create and use fine-grained maps of real-world environments for use in mobile apps. Investors are smelling gold in the water here, hoping that mobile gaming specialist Phunware might create unique gaming models based on this technology and maybe even license the patent to other companies in the mobile gaming space.

A group of businesspeople tug on a rope to point the enormous charting arrow they're standing on upward.

Image source: Getty Images.

Now what

The patent award was disclosed in regulatory filing on Tuesday, but Phunware's stock didn't move until Thursday's press release made a bigger splash. The delayed market reaction points to retail investors driving most of the pricing action, underscoring the intense volatility of unprofitable microcap stocks. As a reminder, Phunware shares gained 2,000% in January only to lose 90% of their newfound gains in February, then took another 57% plunge in March. As random walks down Wall Street go, I'd rather not touch this one until the company starts reporting some worthwhile business results. So far, the wild swings have been built on speculation.