Up 40%: What on earth happened to BrainChip shares in November?

How did Brainchip shares pull off such an incredible November?

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It ended up being a pretty decent month for the All Ordinaries Index (ASX: XAO) and most ASX shares over November. During the month just gone, the All Ords rose by a robust 4.7%. But let's talk about BrainChip Holdings Ltd (ASX: BRN) shares.

If you thought a 4.7% rise was a good inning for the penultimate month of the year, wait until you hear what happened to ASX artificial intelligence (AI) share Brainchip. This company began November going for 15.5 cents a share. But by yesterday's close, Brainchip had rocketed all the way up to 22 cents a pop. That means that this company recorded a whopping 41.94% gain for the month of November.

That would have made many a Brainchip investor happy indeed.

It was even better for this company at several points last month. Early in November, Brainchip climbed as high as 25 cents a share, which was a gain worth more than 61% at the time. Brainchip subsequently dropped back down to below 20 cents a share in the week after this spike. However, towards the end of the month, Brainchip climbed again. The company hit 23 cents a share on Wednesday this week.

So what went so right for Brainchip shares over November?

How did Brainchip shares pull off a 40% gain last month?

Well, it's unfortunately not entirely clear.

Earlier last month, we took a look at Brainchip's massive gains and concluded that it was possibly due to a revision of sentiment following what was initially a poorly received quarterly update. This told investors that Brainchip's cash balance had plunged by US$4 million over the three months ending 30 September. That meant the company finished the quarter with US$17.8 million in the bank.

Brainchip shares fell heavily when this report was released, but subsequently jumped on a rocket, climbing by almost 50% by 8 November, the day we saw the shares reach the 25 cents a share mark. As we posited last month, this could have been helped by a short squeeze, given the relatively large amount of shares that were held in a short position at the time.

Tellingly, the ASX actually issued Brainchip with a speeding ticket that day, as its eye-watering gains had little obvious catalyst.

Apart from all of that, there wasn't a whole lot of news out of Brainchip over November. We did get a notice that the company's chief technology officer and co-founder, Peter Van der Made, was retiring on 21 November, Van der Made has been replaced by Dr M. Antony Lewis.

But this probably doesn't explain too much.

So it seems that Brainchip's wild November has little obvious explanation, apart from the now-trademark volatility that Brainchip shares continue to demonstrate. Despite its positive month last month, the Brainchip share price remains down by 72.7% over 2023 to date.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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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