What happened

Shares of small-cap satellite communications company Globalstar (NYSEMKT:GSAT) closed 24.8% higher on Wednesday on no discernible news -- and that's not really surprising.

Fact is, Globalstar's stock price tends to hop around quite a lot, up one day, down the next, whether or not there's an obvious reason for moves.

Cartoon character riding a scooter up a rising arrow

Image source: Getty Images.

So what

Despite its respectable market capitalization of $700 million and change, Globalstar is what we call a "penny stock," with a price well below $1 a share. As such, changes of just a few pennies in its price can drive huge percentage gains and losses in the stock.

This fact makes the stock ripe for manipulation by momentum investors, and also attracts more momentum investors to it when they sense that the stock has begun moving one way or the other. Even a 25% change in share price such as the one we saw today, therefore, doesn't necessarily indicate that there's anything real happening that could justify the move.

So what

Of course, it doesn't mean there is no explanation, either. For example, both Tuesday and Wednesday, shares of Maxar Technologies made big moves in response to a new buy rating from JPMorgan. Given that both Maxar and Globalstar operate in the field of space exploration and business, and that both stocks carry hefty debt loads (albeit Maxar's is much heavier than Globalstar's), it is possible investors were thinking, "If Maxar can win an upgrade, maybe Globalstar can too."

So, perhaps some are positioning themselves to benefit if some analyst comes along and does upgrade Globalstar stock. I suppose that could happen. Unlike those momentum investors, though, I think I'll wait until I see a compelling case for Globalstar before buying it hand over fist.

Patience is a virtue, and the early bird sometimes gets stuck with a worm.