Stock Watch: Rises on Speculation

Shares of online postage company (Nasdaq: STMP) soared more than 30 percent on Friday, climbing 8-7/16 to 36, as rumors began to circulate about the company’s technology being approved by the U.S. Postal Service. Even if is on the cusp of approval, this one-day run up seems like a little much.

After all, investors who bought into, as well as the underwriters who took the company public, obviously are already counting on the fact that approval is pretty much a done deal. The entire company would almost certainly crumble if its technology wasn’t approved. A lot of the rise in on Friday was probably due to momentum investing.

Don’t be surprised to see a pullback in the stock, even if the technology is approved.

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