Here’s why the Humacyte (HUMA) stock price is pumping

Humacyte (NASDAQ: HUMA) stock price is pumping this week. It jumped by over 10% on Friday, continuing a spectacular rally that started last week. It has soared by 40% from its lowest point this month and is trading at its highest point since February 29th.

The reason why the stock surged is because a senior US Senator, Tommy Tuberville, disclosed a stake in it. This was a surprising purchase because of the company is small valuation of less than $400 million. 

The purchase was also notable because Turberville sits on the Armed Services Committee (ASC) in the senate. As such, there are signs that he knows things that most investors and traders don’t have.

🚨 Humacyte stock has risen another 14% since this post yesterday.

It's now up 42% since we posted the first report on Senator Tuberville's purchase Tuesday.

Will keep adding layers to the image below as long as the price keeps rising: pic.twitter.com/6ZlrWOQYZe

— Quiver Quantitative (@QuiverQuant) April 19, 2024

For one, Humacyte is a biotech company that is creating bioengineered human tissues. One of its products is being tested in Ukraine, a country that has been at war in the past two years. In its most recent earnings, the company said the following about the testing in Ukraine:

“The HAV was observed to have higher rates of patency (blood flow), and lower rates of amputation and infection, as compared to historic synthetic graft benchmarks in both the V005 Phase 2/3 clinical trial and the Ukraine humanitarian program.”

Therefore, investors believe that the company will become a big defense contractor if the tests become conclusive enough. That would be a big deal since the US military spends billions in healthcare each year.

Humacyte’s stock performance is a sign of how investors trust politicians when making investment decisions. In the past, some politicians like Nancy Pelosi have done better than professional investors like Warren Buffett.

Tommy Tuberville is one of the most active stock traders in Washington. According to Quiver Analytics, he has executed over 1,150 trades as a senator. Some of his current or previous investments were companies like JPMorgan, Adobe, Accenture, and Applied Materials.

It is worth noting that Humacyte is also a highly volatile company whose stock crashed by over 41% from its highest point in February and its lowest level this month. It recently crashed after the company raised capital by selling shares. Its outstanding share count has risen from 10 million in 2021 to 103.6 million today.

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