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Why Is Fulgent Genetics Stock So Volatile?

By Keith Speights and Brian Orelli, PhD - Feb 9, 2021 at 6:12AM

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There are two simple reasons.

Fulgent Genetics (FLGT 2.39%) stock is up big so far in 2021. However, it's had some pretty wild swings along the way. In this Motley Fool Live video recorded on Feb. 3, contributors Keith Speights and Brian Orelli discuss why Fulgent Genetics stock is so volatile this year.

Brian Orelli: There's a couple of questions on Fulgent Genetics.

Keith Speights: If you want to go ahead, go ahead.

Orelli: The ticker there is FLGT. There's two questions. One, somebody asked "Why did it jump up three times in the last month?" Then somebody else said, "Why did it drop so much yesterday?" The reason why it dropped yesterday, the reason why it's gone up so much is cause they have COVID-19 testing. It's gone up because they've been doing really well with their COVID-19 testing. They do other genetic testing, that's what they started with but their revenue has jumped substantially based on the COVID-19 testing.

Then I think it's gotten into a short squeeze and so it went up quite a bit on Monday and then I think as short squeezes tend to do once all of the shots have covered or enough of the shorts of covered their stock, then the price tends to go back down to where it actually should be.

Speights: Yeah, I'm just looking at the numbers as of Jan. 15, so a little dated. But their short percent of float was around 29%. That's pretty high.

Orelli: Yeah.

Speights: That's enough to qualify it to be a short squeeze candidate for sure.

Orelli: Yeah, I think that's the reason why it dropped yesterday was because it had gone up so much on Monday. I think it was up 20% or 30% on Monday.

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