A Chinese herbal-medicine stock with no revenue has surged 60,000% this year. 5 things to know about the company's mysterious spike.

Business Insider

18-06-2025

Shares of a little-known Chinese herbal medicine company have surged this year, with a fresh rally seeing the price quadruple in less than a week.
It's been a head-scratching move, since the company is unprofitable, and shares have moved on seemingly no news.
Regencell Bioscience Holdings, a Hong Kong-based firm specializing in traditional Chinese medicine, saw its US-listed stock soar 398% over the first two days of the week. But that move pales in comparison to the year-to-date increase, which amounted to roughly 60,000% through Tuesday's close.
The company, which offers a proprietary oral formula it says can help treat disorders like ADHD and autism, has not generated any revenue, according to a regulatory filing from October. Over the last two fiscal years, the company said it lost a combined $10.4 million.
So, what on earth is going on with this stock? Here's what to know.
1. The latest leg of the rally was triggered by a stock split
Regencell, which trades under the ticker "RGC" on the Nasdaq, soared 283% on Monday after its 38-for-1 stock split went into effect. The company originally announced the stock split on June 2.
While stock splits don't generate any value for the company — with overall market cap staying unchanged — they are often viewed as a bullish driver, since a lower per-share price can make a stock more appealing to retail investors.
Regencell finished Monday with a market cap of $30 billion, which swelled further to $39 billion at Tuesday's close. That made it — at least temporarily — worth more than more well-known companies like Lululemon, Kraft Heinz, and Reddit.
2. Retail traders are intrigued, but cautious
The rapid rise of Regencell stock was bound to catch the eye of the retail crowd, but even the enduringly bullish cohort is incredulous about what might be going on.
Though Regencell is still less talked about than flagship stocks like Tesla and Apple, users on Reddit were quick to identify the surge this week, with some speculating that Regencell was the market's newest " meme stock."
"Regencell is doing some weird stuff again," one user wrote on the subreddit r/shortsqueeze.
"I'm trying to decide if I should pull out before a possible crash," another user, who said they were a longtime investor, said on the r/pennystocks subreddit.
"I was gambling. Didn't have a clue what this company is," another user wrote on a separate thread on r/shortsqueeze about Regencell this month. "I've been watching it go the last two weeks and keep telling myself that it will crash as soon as I buy back in."
3. There's possible influence from RFK's vaccine skepticism
Regencell stock was also surging around the time Robert F. Kennedy Jr. continued his anti-vaccine push, with the Health and Human Services Secretary removing all members of the Advisory Committee on Immunization Practices last week, an independent panel that helps shape vaccination policies in the US.
ADHD or Autism Spectrum Disorder.
The formula, which is meant to be taken twice a day and aims to treat the "fundamental cause" of neurocognitive disorders, contains "only natural ingredients," the firm says.
Its website lists various herbs with qualities that can help with blood circulation, digestion, "detoxication," and other functions.
"We have not generated revenue from any TCM formulae candidates or applied for any regulatory approvals, nor have distribution capabilities or experience or any granted patents or pending patent applications and may never be profitable," the firm said in its October filing.
4. The stock has a tiny float, with most shares owned by the CEO
The company only has a small number of shares available to trade, one factor that can explain the large swings in its stock. Out of its 500 million shares, just 30 million are available for public trading. That's a far lower percentage than the average for the more widely traded stocks that populate major indexes.
Most of the company is owned by Regencell's CEO, Yat-Gai Au. He owned 86% of the company, or a $426 million stake in the first quarter, according to holdings data.
His net worth has surged to as much as $33 billion this week, according to Bloomberg, vaulting him into the ranks of the world's richest people.
Regencell's second-largest holder, Digital Mobile Venture, owned 7.6% of the company at the end of the first quarter, or around $37.5 million. RBC, BlackRock, and Morgan Stanley also owned miniscule amounts of the stock.
5. There's been controversy around shares of China- and Hong Kong-based firms
Initial public offerings from Chinese or Hong Kong-based firms have been in the spotlight recently.
A report from The Wall Street Journal this week said that more than 20 China -based companies and 17 Hong Kong-based companies that went public on the Nasdaq since 2020 have lost 50% of their value or more in a single trading day over the last two years.
In 2022, the Financial Industry Regulatory Authority issued a warning about a "heightened threat of fraud" related to small-cap companies that had recently gone public on US exchanges.
Many of the companies associated with fraud had operators based in China or broker-dealers based in Hong Kong, the regulator said.
In many cases, the broker-dealers were allocated 90% or more of the public float, Finra said, meaning they held most of the IPO shares.
The small remaining float leaves stocks vulnerable to market manipulation, it said, referring to such companies as " ramp-and-dump schemes."