Shares in Wish List holding American Shared Hospital Services skyrocketed yesterday on more than 3.4 million shares traded (or more shares than had been traded in all of 2020).  While these gains were not warranted by any material change in the business, the company was founded by Dr. Ernest A. Bates, who is black.  Following the horrific death of George Floyd there has been a widespread push for capital to be directed into black owned and operated companies. AMS’s share price benefited from this trend. 

The wild price action in AMS has not been an isolated occurrence.  Rather, the rush of speculative capital flowing into black owned and operated companies has been so strong this week that some stock prices are displaying mania-like tendencies.  For example, Urban One, Inc. went from $1.91 on Monday and $40 on Tuesday.  In a word, wow!

While this small snapshot is hardly definitive, it does suggest that some money is being diverted towards black-related businesses in a highly speculative manner.  Moreover, given that the 4 black CEOs that run fortune 500 companies haven’t seen their stock price benefit from this trend, it appears that smaller stocks are attracting outsized interest.  Quite frankly, it is as if speculators and greater fools are front-running the thesis that BLM-related capital flows will, eventually, propel shares even higher.

Like watching the late 1990s IPO-insanity parade, I have no idea if these monster gains will continue.  However, I do know one thing: AMS founder Ernest A. Bates retired as President and CEO on May 6, 2020. Shhh…