T2 Biosystems (NASDAQ: TTOO) stock was up 51% yesterday. TTOO stock is also up another 8% or so this morning. There is no interesting news from the company to explain this. We appear to be simply in meme stock territory. At least we hope that’s what it is - this idea is worse: “2 Biosystems, however, has a funding problem that’s quickly turning it into the next Mullen Automotive (NASDAQ:MULN), an electric vehicle startup that burned through millions of retail investor cash.” Worse because our idea of Mullen is that it has already crossed the line into a complete and horrendous car crash if not a fraud. So, someone telling is that T2 is going to be like Mullen does not fill with confidence - although in more detail they’re saying the cash position is like that.
This is interesting too but we need to know the reason why: “T2 Biosystems (NASDAQ:TTOO) has gained about 385% in the last month. Shares of the company, which develops in vitro diagnostics tools, began to rise after investors learned on July 31 that it had been granted an extension to comply with the Nasdaq’s minimum bid price of $1 and market value of listed securities requirement of at least $35 million.” People are buying it because people are buying it could even be the correct reason. But we’d all like to know why are people buying it? For it’s only at that point that we can begin to work out when people are going to stop doing so.
T2 Biosystems stock price from Google Finance
Yes, we know. Just the idea that meme stock speculators are looking at T2 Biosciences does make it an interesting speculation for ourselves. But we’ve got to be both careful and clear here. Careful, in that unless we know what the buying - what has sparked it off? - we’ll not be able to work out when it will stop and the price reverse. We also need to be clear. There’s nothing wrong with leaping aboard a meme stock rally. As long as we know that’s what we’re doing. This is not investment, this is betting. This is not something done with the 401 k but as an alternative to - and with about the same amount of money as - going to the ball game.
Betting and speculation are not investing - so don’t get them confused.
