The bioenterprise Peptron has seen its stock price rise significantly, allowing it to secure the third position in the KOSDAQ market ranking. This surge in stock prices has been fueled by two short squeezes from short-selling investors. A short squeeze refers to the phenomenon where investors who short-sell stocks, anticipating a price drop, buy shares to mitigate losses when prices rise, ultimately causing further price increases.
According to the Korea Exchange on the 24th, Peptron's stock price has increased by 184.8% this year (from January 2 to July 24). Thanks to the rapid rise in stock prices, Peptron's position in the KOSDAQ market has also changed. Its market capitalization has increased from 2.372 trillion won at the end of last year to 6.628 trillion won as of today, propelling its market cap ranking from 15th to 3rd.
This year, Peptron's stock price has experienced two significant upward phases on its upward trajectory. The first turning point was recorded on April 11, when it hit the upper price limit for the day. The collaboration with global pharmaceutical company Eli Lilly, which developed the obesity treatment drug 'Zepbound', garnered attention amidst the popularity of related stocks.
Peptron possesses 'smart depot' technology that prolongs the effectiveness of drugs using biodegradable polymers. Peptron entered into a platform technology evaluation contract with Eli Lilly regarding smart depot technology in October of last year. If Peptron submits the requested data from Eli Lilly this year, a formal contract may be finalized.
At that time, the short-selling balance on Peptron stocks sharply declined. Peptron's net short position increased from 20,451 shares on March 31, when short-selling transactions were fully resumed, to 80,349 shares on April 9. However, it plummeted to 34,516 shares on the 11th, when the stock hit the upper price limit. This indicates that many investors returned to a buying position after closing their short positions.
Since then, Peptron's stock resumed a rally starting from the 15th of this month. The news that Peptron received approval from the Ministry of Food and Drug Safety for the one-month duration prostate cancer and precocious puberty treatment 'Loopone' acted as positive news. Peptron's stock soared from a closing price of 192,200 won on the 14th to 301,000 won on the 21st.
Before starting its second rally, the short-selling balance for Peptron had already increased significantly. Concerns that the technology transfer contract with Eli Lilly would not proceed to a final contract led to a surge in short-selling. However, as the stock price surged this month, more than half of the substantial short balance held was liquidated. Peptron's net short position decreased from 643,105 shares on the 8th to 306,330 shares on the 21st.
On the 21st, Peptron's stock price soared to an all-time high of 315,000 won during intraday trading following the two short squeezes. However, over the next three trading days, the stock price showed a downward trend, falling by 9.7% based on the closing price (284,500 won) compared to the peak. Nevertheless, considering that the average cumulative short price for Peptron since the full resumption of short-selling is estimated at 168,038 won, it appears that many short-selling investors are still in an evaluation loss phase.
Looking ahead, the direction of Peptron's stock price is expected to create yet another divide in fortunes between general investors and short-selling investors. While there are optimistic projections based on the approval of Loopone and the recognition of Peptron's smart depot technology, there are also significant burdens in terms of valuation.
Peptron's price-to-book ratio (PBR) increased from 15.5 times at the end of last year to 56.7 times based on this year's earnings forecast. This surpasses the industry average of 45.3 times.