YS Biopharma (NASDAQ: YS) stock is up 54%. YS stock is up because the two main people within the company have both announced stock purchases. Now, this is not a perfect measure of anything at all. But a substantial commitment of management’s own money into the stock is at least a useful guide - they think the company’s undervalued. They may be right, they may be wrong, but there’s their revealed preference for all to see.
As to what happens at YS: “YS Biopharma Co., Ltd., a biopharmaceutical company, engages in discovering, developing, manufacturing, and commercializing of vaccines and therapeutic biologics for infectious diseases and cancer. The company develops a proprietary PIKA immunomodulating technology platform and a series of product targeting PIKA rabies vaccine, PIKA recombinant Covid-19 vaccine, and PIKA YS-ON-001. It operates in China, the United States, Singapore, the United Arab Emirates, and the Philippines.” It’s also based in Beijing.
So, what we’ve got here is another China small cap on Nasdaq playing with pharma development. Hmm. It also doesn’t help that the stock is down 90% since the arrival on the market earlier this year.
YS Biopharma stock price from Google Finance
But then we’ve got this news: “YS Biopharma Co., Ltd. (NASDAQ: YS) ("YS Biopharma" or the "Company"), a global biopharmaceutical company dedicated to discovering, developing, manufacturing, and delivering new generations of vaccines and therapeutic biologics for infectious diseases and cancer, today announced that the Company's Founder and Chairperson, Mr. Yi Zhang, and its Director and Chief Executive Officer, Dr. Hui Shao, have purchased 429,188 of the Company's ordinary shares at an average price of $1.407 per share, and 46,300 of the Company's ordinary shares at an average price of $1.46 per share, respectively, on the open market.”
As we say, that doesn’t prove anything. There are far too many ways to lay off such risk for us even to be 100% certain that they’re really exposed. But it is indicative at least. Assume they have bought, at risk, and we can take that as an insistence by the management that the shares really are undervalued. That’s value additive information - and thus the YS stock price jump.
Now, whether that belief turns out to be justified in the medium to longer term is another matter. But for the moment, if we take them at their word - which is, recall, where they’ve put their money - then this is value additive.