Karuna Therapeutics' Crash Reminds Investors How Dangerous Biotech Stocks Can Be

Investing in biotech stocks can be very risky. Positive results from a clinical trial can send a stock's valuation through the roof, while a poor result can send it crashing in a hurry. A great example is what's happened with Karuna Therapeutics (NASDAQ: KRTX) and the wild ride it has taken investors on, leaving many wondering where it will go from here.

Let's take a closer look at the stock to see what's behind its recent movements and whether it's a good buy today.

Karuna started trading on the Nasdaq in June 2019, and there wasn't much movement from the stock until November when shares jumped from less than $18 on Nov. 15 to $96 the following trading day. The stock's volume also spiked, with nearly 15 million shares traded on that day. Previously, Karuna's shares had averaged volumes of less than 100,000.

Source Fool.com