More than Moderna: The stock that soared by 423% in a week
A small US stock surged by the highest rate in the market, but behind the jump hides a technical mechanism rather than a business breakthrough. At the same time, Moderna jumped about 177% after a historic success in a personalized cancer vaccine trial. What separates speculation from revolution?
The hottest stock on Wall Street last week was not that of a tech giant or a well-known AI company, but of a tiny shell company called RF Acquisition Corp II (NASDAQ: RFAI). The stock soared about 356% on Friday alone and closed the week with a rise of about 423%, after shareholders approved the merger with the company Nanyang Biologics.
However, this sharp jump is an important reminder: not every dramatic surge reflects a real economic breakthrough.
RF Acquisition is what is known as a shell company (SPAC) - a company that raised money and went public with one goal: to merge new activity into it. On August 19, shareholders approved the merger by an overwhelming majority: 6,765,584 votes in favor against 440,604 against.
The deal values Nanyang Biologics, a Singapore-based AI-driven drug research company, at about $1.5 billion, and the merged company is expected to trade under the ticker NYB.
Despite the surge, it is still a relatively small company. At a valuation of about $484 million at Friday's close, RFAI remained under half a billion dollars - but it is certainly an impressive jump from a stock that traded around $10 just a few days earlier.
Behind the impressive numbers hides a problem. Shareholders submitted early redemption requests for 3,956,323 shares - almost 99% of the common shares in circulation. That is, almost all the original investors asked for their money back from the trust fund, which held about $44.5 million. If the requests are not cancelled, they could almost completely empty the cash coffers of the merged company.
The financial picture of the shell itself is also fragile: at the end of June, the company held only $10,191 in cash outside the trust, with a working capital deficit of $1.28 million, and management noted a "substantial doubt" in the company's ability to continue operating.
Analyst coverage is extremely sparse: according to MarketBeat data, there is only one recommendation, a "sell" from Weiss Ratings, and no price target. The surge, therefore, relies on speculation and a shortage of shares available for trading, not on business fundamentals.
The truly big story of the week was actually a more "modest" jump in percentage terms. Moderna stock (NASDAQ: MRNA) jumped about 177% in one day and closed on August 19 at $174.38, after the company and its partner Merck reported positive results in a phase 3 trial of a cancer vaccine. In weekly summary, the stock rose by about 129%.
This is the first time that a personalized mRNA-based cancer vaccine has succeeded in an advanced-stage trial - a milestone that for years was considered a distant dream.
The trial, which included more than 1,100 high-risk melanoma patients, tested a combination of the Intesmeran Autogen vaccine with Merck's immunotherapy drug Keytruda. Each vaccine dose is produced personally for the patient and contains mRNA instructions for identifying up to 34 unique tumor markers. The treatment significantly extended the time patients remained without disease recurrence.
Moderna CEO, Stephane Bancel, called it a defining moment for the field of cancer research. At the investment house William Blair, they upgraded the stock recommendation to "outperform," and at Barclays, they estimated that the treatment could generate about $3 billion in the melanoma market by 2035.
The two stocks have completely different risk profiles. In RFAI, the merger might still not close, and even if it does - a tiny trading float could create wild fluctuations in both directions. This is a clearly speculative stock, the kind that a solid investor should know mainly to stay away from.
Moderna presents a different risk: the company is still losing money (in the second quarter, revenue of $145 million against a loss of $782 million), and the pricing already reflects an expectation that the vaccine will also succeed in other types of cancer such as lung and kidney. Regulatory approval is expected to arrive at the earliest in 2027, and until then, a real clinical and commercial risk remains.
The bottom line for the investor: big surges are not necessarily the best opportunity. RFAI illustrates how a technical mechanism can inflate a stock, while Moderna reminds that real value is built on a real breakthrough - but it also comes with a price and risk.
