Hello,

Mr. Market giveth, and he taketh away—and every now and then, he giveth a lot. Case in point: Regencell Bioscience Ltd. If you haven’t heard of it, don’t worry—very few had. Regencell is a Hong Kong-based company that develops traditional Chinese herbal remedies to treat neurodevelopmental disorders. It had existed in relative anonymity until recently, when its share price rallied roughly 64,000% YTD (not a typo).

 

What makes this story more extraordinary is the fact that the company has only twelve employees and has never generated any profits—in fact, it is yet to generate any revenue at all. However, Regencell’s stock traded as high as $83 on Monday last week, having been worth small change only a year ago. And the dramatic growth is raising more than just eyebrows: the company’s CEO, Yat-Gai Au, who holds a hefty 86% stake, briefly saw his net worth rise to over $33 billion—momentarily making him one of the world’s top 100 wealthiest individuals.

 

So, what drove the surge? It isn’t fully clear. There haven’t been any obvious catalysts apart from a stock split last week, which made Regencell’s shares more accessible for its growing crowd of speculators. Many of these likely learnt the dangers of jumping on a winning stock that one doesn’t fully understand… Regencell’s price had fallen over 50% at market close on Friday relative to highs set earlier in the week.

 

As always, if you wish to discuss anything in further detail, please do get in touch.