Bruush Oral Care (NASDAQ BRSH) stock was down 50% or so yesterday. BRSH stock is now up 50% or so today. No, this does not mean that Bruush stock is back to where it was, percentages don’t work that way. Or, at least, percentages as we apply them to stock prices don’t.
As to what Bruush actually does: “Bruush Oral Care Inc., an oral care company, manufactures and sells electric toothbrushes in the United States and Canada. The company offers Brüush starter kit, including electric toothbrush, three brush heads, a magnetic charging stand and USB power adapter, and a travel case. It also provides brush head refills. The company sells its products through its website www.bruush.com and various third-party retail partners” And, well, yes. There are plenty of electric toothbrush manufacturers out there, some of them even with brand names we’ve heard of. Brush says it’s a really lovely, fast, little model but there we are.
The actually important thing for us to grasp is that the market capitalisation here is about the $1 million mark. It really doesn’t take much of a turn in the weights of buying and selling to move this BRSH stock price move substantially.
Bruush Oral Care stock price from Google Finance
There’s no particular news to associate with these price moves. The most recent mention even in Google News is stories about the reverse stock split three weeks back.
Given that entire absence of news we’d therefore suggest this is just one of those things. With a $1 million market cap even limited selling could cause a 50% price drop. So too could little buying looking to benefit from a dead cat bounce.
But our real point here is that the 50% rise does not get back to the starting point. That starting price was $3.47 which then fell by $1.74 to $1.73, that 50% fall. That $1.73 then rose by 50%, or 0.92. The final position after a 50% fall and a 50% rise is $2.65, or a 23% fall overall. Simply because we measure a stock price change from the starting price of “that day’s trading” not some price point in the past.
Worth recalling this when trading. Share price climbs have to be larger in percentage terms to get us back to the starting point after a fall. Simply because of which price we use as the denominator in such percentage calculations.