BlackBerry Ltd. said there weren't any major changes at the company on Monday, despite a trading frenzy that drove its share price to its highest level since October 2011.
Toronto-listed shares rose as high as $26.51, up more than 48 per cent from Friday's closing price of $17.86. The stock ended the day at $22.92 per share, up 28.3 per cent.
Within the past year, the shares have traded for as little as $3.94 each, but have risen 73.6 per cent over the past five days alone.
About 26.3 million Toronto-listed shares changed hands, compared with an average day's trading volume of about 7.9 million.
The Waterloo, Ont.- based software company released a statement at the request of the Investment Industry Regulatory Organization of Canada, saying it was "not aware of any material, undisclosed corporate developments and has no material change in its business or affairs that has not been publicly disclosed that would account for the recent increase in the market price or trading volume of its common shares."
IIROC briefly halted the stock Monday morning after the surge set off the regulator's circuit breaker, which slows down trading to ensure a fair and orderly market.
The rise of both BlackBerry's Toronto and U.S.-listed shares comes as North American markets hover near highs, after recovering from the depths of the COVID-19 pandemic lows last year. The S&P/TSX Composite index popped above 18,000 on Jan. 7, and the Nasdaq hit a record high on Monday.
There has been a recent pattern of investors taking profits from the market's latest gains, and searching for money-making opportunities in the stocks that have been left behind by the overall upward trend, says Colin Cieszynski, chief market strategist at SIA Wealth Management.
"All this money's been made in other stocks," says Cieszynski. "Now they're all coming into these smaller names, and they're swamping the market —and their prices are exploding. That's not specific to BlackBerry, there's a whole ton of them."
Cieszynski pointed to other stocks, like those of GameStop Corp. and AMC Entertainment Holdings Inc., that have jumped this month without any major news related to the companies' earnings. In some cases, investors who have bet against these stocks have had to buy further in to cover their losses during the volatile trading, creating what's known as a "short squeeze."
Social media popularity can also sometimes hype up stocks, Cieszynski says, and the overall effect is even more pronounced for smaller stocks than companies with large market capitalizations like Tesla or Apple.
"Sometimes these things take on a life on their own. There's no real fundamental thing driving it, it's more of market dynamics," says Cieszynski.
"It's like musical chairs, right? And then when the music stops, everybody's scrambling."
BlackBerry has also received warm investor reception for its deal with Amazon Web Services to develop and market BlackBerry's intelligent vehicle data platform, called IVY. When that deal was announced on Dec. 1, BlackBerry gained as much as 63.9 per cent to what was then a 52-week high of $9.08.
The company's sales fell in the three months that ended Nov. 30, but its financial results still beat analyst expectations when they were posted in mid-December. BlackBerry also resolved an intellectual property fight with Facebook this month.
But Mike Archibald, vice-president and portfolio manager with AGF Investments Inc., says "there's certainly signs of high investor speculation happening in the marketplace."
"That's having some level of spillover onto other parts of the market that have done fairly well," said Archibald. "But nothing fundamental as to why BlackBerry is moving so significantly today."
This report by The Canadian Press was first published Jan. 25, 2021.
— With files from Ross Marowits
Anita Balakrishnan, The Canadian Press