Heir to Bed Bath & Beyond, MindMed (MNMD) stock advances another 18% in Friday premarket

• MNMD stock is up about 20% in Friday's premarket.
• MindMed stock is the newest interest of BBBY champion Jake Freeman.
• Mindmed stock closed up 36% on Thursday.

MindMed (MNMD) is at it again. The trendy psychedelic pharma stock has added 19.6% to trade at $1.22 in Friday's premarket. Much of the interest surrounding the small-cap is due to the pivot from newfound celebrity trader Jake Freeman. The 20-year-old University of Southern California applied mathematics student became world-famous on Tuesday after jettisoning the 5 million shares of Bad Bath & Beyond (BBBY) stock he bought with borrowed money from his uncle and other family members. The trade netted him $110 million.

MindMed stock news

In subsequent interviews Freeman the younger added that he was using some of the profits to build a position with his uncle in MindMed. Further reporting has shown that his uncle, Dr. Scott Freeman, was the former chief medical officer of MindMed, a position he left after just a year.

Based on reporting from Business Insider, Jake Freeman said he cannot disclose why his uncle left the company due to a non-disclosure agreement. Interesting! What is known is that Scott Freeman co-founded a biotech company called Savant around 2009. That company was bought out by MindMed, and Scott Freeman took over the chief medical officer role for the first year after the acquisition.

An interview the elder Freeman gave to YouTube channel Psychydelic Invest has Scott saying his interest in getting reinvolved with MindMed comes after noticing the slow development track of the company.

After building a 5.6% stake in MindMed stock, the two Freemans sent a letter to the board. They have proposed laying off half of the company's staff, putting a stop to a proposed new equity offering, cutting nearly $22 million in expenditures and quickly putting the firm's MM-120 drug on a path to a Phase 3 trial under the Food & Drug Administration (FDA). That drug meant to treat general anxiety disorder is current undergoing a Phase 2 trial. The change would mean that the drug could hit pharmacy shelves in four years rather than 8.

MindMed stock forecast

MNMD stock initially rose as high as $1.33 on Thursday but then backtracked and closed at $1.02. That still amounted to a 36% gain. It does not seem like traders have given up, based on the premarket activity. Once again the premarket shows there is some resistance above $1.20.

Being a weekly chart, there has not been much change in a day. Still bulls need to push the stock above the 50-week moving average that stopped the rally on Thursday. Currently, it sits at $1.36. From there MNMD stock could encounter more resistance at $1.50, where the stock topped out at in the first week of February. Above that point is the supply zone between $2.80 and $3.00. That region was stubborn throughout the second half of 2021. Support might be found at Thursday's closing price since it coincides with the opening and closing prices of late May and early June at $1.04 and $1.05. The 20-week moving average at $0.79 should provide longer-term support.

MindMed weekly chart