Shares of artificial intelligence company Laix Inc soared as much as 355% on Friday while those of several other small Chinese educational companies with relatively few shares available to be traded also jumped.
Some of the stocks were being touted on social media websites Reddit and Twitter, though nothing like the recent furor over GameStop Corp that has sent its stock soaring.
Laix shares were up 70.3% at $4.36 in afternoon trading after hitting a high of $11.65 earlier in the session. Shares of Meten Edtechx Education Group Ltd rose 13.9% to $3.12, Sunlands Technology Group was up 10.8% at $1.55, RYB Education Inc jumped 18.1% to $3.19.
The free float for those stocks, or number of shares available to be traded publicly, was 42 million or lower. Apple Inc, the largest company by market value, has a free float of 16.78 billion shares.
"Smaller cap stocks are always going to be more influenced by social media ... by different things so I'm not surprised if it is small Chinese names, that stuff they can push around but they will struggle to push the bigger names now," said Dennis Dick, head of markets structure, proprietary trader at Bright Trading LLC in Las Vegas.
Unlike GameStop and other stocks at the center of a retail-driven stock rally, short interest in the Chinese educational stocks was very small, according to analytics firm S3 Partners.
(Reporting by Chuck Mikolajczak and Lewis Krauskopf; Editing by Alden Bentley and Richard Chang)
