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Since the markets opened today, a common name has been making waves among penny stocks. Kaival brands (NASDAQ:KAVL) is a Florida-based company built around the acquisition and development of vape brands. This morning KAVL shares have risen incredibly as the stock price has more than doubled. While the stock has fallen a bit since then, these types of gains are noteworthy. These gains are due to a recent announcement by the US Food and Drug Administration (FDA) which should delight investors.

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What happened with KAVL Stock

This morning, KAVL stock soared 90% in pre-market trading, after the company announced that the FDA issued an administrative stay of a denial-to-market order for a Kaival-branded product, Bidi Vapor. .

While KAVL has declined since its early morning peak, it is still up over 20% for the day. For a relatively unknown penny stock, that’s a pretty impressive number.

What this means

Anyone who paid attention last week, however, saw that KAVL doesn’t need media attention to gain momentum. On October 19, stocks rose steadily after the stock caught the attention of retail traders, rising more than 21% in pre-market trading. It appears that social media communities have taken a lot of interest in KAVL actions, which led to the pump last week.

The company is still new, having only been launched in 2019. In fact, it was only traded on the Nasdaq since July 2021. While the stock may be slow to take off, this is exactly the type that could collect the state of the stock itself. Not only is it currently trading at very low levels, but the company is also dealing with vaping devices, a very popular area where demand is increasing as younger consumers search for alternatives to cigarettes.

Why is this important

To this day, Kaival still has the advantage of operating in an area that many consumers are unfamiliar with. In other words, researchers are still figuring out what health effects, if any, are associated with vaping. While there is potential for a flashback down the road, companies like Kaival have a real opportunity right now.

So where are things now? In essence, the original refusal to market order means that the Bidi product has failed to meet regulatory standards. Due to MDO, the brand would not be able to market its products. However, the suspension means Bidi can continue to operate while regulators examine further information. Hopefully for the shareholders, Kaival uses this time wisely.

Investors have a lot to learn about this little-known company, but in the meantime, KAVL stock is worth watching. Additional volatility could be ahead.

At the time of publication, Samuel O’Brient had (directly or indirectly) no position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publication guidelines.

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