MindMed (MNMD) stock soars over 35% in a speculative frenzy

MindMed stock is the newest interest of BBBY champion Jake Freeman.
MNMD stock is up over 60% on Thursday.
The pre-revenue company studies psychedelic drugs for therapeutic uses.

Clay Webster FXStreet

Update: The price of MindMed (MNMD) rallied hard and broke through the three-month consolidative phase on Thursday, amassing a massive gain of 36.18% on the day to settle at $1.020. The share of the biotech company reached as high as $1.33 and soared roughly 77% at one point during the day, as news floated around, citing that a college student who made $110 million trading Bed Bath & Beyond stock is now targeting MindMed. The Financial Times (FT) reported on how the 20-year-old Jake Freeman and his family made $110 million in one-month trading Bed Bath & Beyond stock. There was no other fundamental factor or the company’s new developments driving such a huge move.

Despite the early decline in Wall Street indices, expectations of slower monetary tightening on signs that high inflation is cooling helped them recover some ground, in turn, adding to the strength in the MNMD stock price.

Just off the cusp of becoming a centimillionaire as one of the largest winners from Bed Bath & Beyond's (BBBY) 400% 1-month surge, 20-year-old Jake Freeman may be leading the charge into the newest meme stock: MindMed (MNMD). Shares of the clinical stage biopharma stock are up 60% to $1.21 at the start of trading on Thursday.

Also read: Bed Bath & Beyond Stock Forecast: BBBY loses 12.5% after Ryan Cohen files to sell stake

Freeman became an overnight sensation when it was revealed in a Financial Times article that he had made approximately $110 million from his stake in BBBY in just one month. The University of Southern California applied mathematics major used funds from his uncle and other unnamed "friends" to turn a $27.5 million stake, about 6% of the struggling home good retailer, into a $130-plus million windfall. Bed Bath & Beyond stock surged from below $5 to $28 between mid-July and mid-August as the meme stock community rallied behind it.

Freeman is rather young but is said to have interned for Volaris Capital for several years as a teenager.

After selling out of his BBBY stake, news reports say Freeman and his uncle have built a sizable activist stake in MindMed. This futuristic biopharma small-cap (even with the surge Thursday, it is worth just half a billion dollars) studies how psychedelic drugs can be used to treat anxiety disorders, ADHD and opioid withdrawal. Based in Vancouver, Canada, the pre-revenue firm has just 41 employees and lost $93 million in 2021.

MindMed stock forecast

MNMD stock smashed through the 20-week moving average on Thursday and got stopped out in the first hour just below the 50-week moving average at $1.33. That could be the range high, but normally these bandwagon meme stocks carry on for some time. With such a small market cap, it would be unsurprising if this one makes a new all-time high above the previous record of $5.77 on April 26, 2021.

Before that, there appears to be resistance at $5 and $3.50. The latter price appears to be a popular price for weekly openings and closings during 2021. Before MindMed stock makes it there, it will have to overtake resistance in the $2.80 to $3 range, which held up from August to November 2021 before 2022's major sell-off. Despite Thursday's surge, MNMD stock is down 59% over the past year.

MindMed weekly chart

Previous updates

Update: The price of MindMed (MNMD) dashed higher on Thursday ending a whopping 36.18% higher at $1.02 by the close of play. It had gapped from a post-market close of $0.75c. It had run as high as $1.44c. The stock was bid on the back of investors reacting to reports by the Financial Times and other online publications about 20-year-old Jake Freeman and how his family made $110 million in one-month trading Bed Bath & Beyond (BBBY -19.63%) stock. Freeman's uncle, Scott Freeman, was a co-founder and executive with MindMed. The company FCM MM Holdings owned by Freeman is pushing MindMed to make changes that could reward its shareholders.

Fundamentally, whether the hype can continue over the remainder of the week and beyond will depend on the traction that can be made with the company's plans for the third quarter, but the technical outlook is bearish while below the $1.05 June highs as the price moves back towards the $0.75c gap which could be closed in coming days.

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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