Why is the Polynovo share price rocketing 17%?

Could more insider buying be behind Polynovo’s Tuesday gains?

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Key points

  • The Polynovo share price launched 21.5% to its intraday high of $1.13 on Tuesday
  • Its gain came amid more news of insider buying at the company after an entity owned by its chair forked out $227,500 on-market yesterday
  • The surge is bad news for short-sellers targeting Polynovo with the company one of the most shorted on the ASX 

The Polynovo Ltd (ASX: PNV) share price is taking off on Tuesday despite the broader market’s downturn.

At the time of writing, the Polynovo share price is $1.09, 17.2% higher than its previous close. Additionally, the medical device company’s chair has snapped up another parcel of Polynovo shares.

For context, the All Ordinaries Index (ASX: XAO) and the S&P/ASX 200 Index (ASX: XJO) are both down around 1.3% right now. That marks a slight recovery after the indexes both hit a three-month low this morning.

Let’s take a closer look at what might be going on with the Polynovo share price today.

What’s going on with Polynovo today?

The Polynovo share price is surging 17% today amid more news of insider buying.

An entity owned by the company’s chair David Williams splashed out yesterday, snapping up $227,500 worth of Polynovo stock on the market.

The purchase saw the entity taking home 250,000 shares at a cost of 91 cents apiece. Thus, they’re already bringing a 19.8% return on investment.

That – and the 1.5 million shares Williams purchased last week – has brought his holding in the company to 20.65 million shares.

Additionally, another two of the company’s directors reported buying into its stock last week, each snapping up parcels of 100,000 shares.

That might suggest insiders believe the Polynovo share price recently bottomed out.

Today’s gains see the medical device company’s stock surpassing $1 for the first time in nearly two months. That’s a win for investors, but it might be disappointing news for those shorting the stock.

The most recent data available shows 10% of Polynovo shares are in the hands of short-sellers, making it the fifth most shorted stock on the ASX, according to The Motley Fool Australia’s latest weekly short-selling breakdown.

Polynovo share price snapshot

Despite today’s surge, Polynovo’s shares are still trading for 29% less than what they were at the start of 2022.

They have also fallen 60% since this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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