(Reuters) - Shares of Digital Ally Inc, a company that produces wearable cameras, jumped 79 percent to $14.24 on Monday as outrage over the fatal police shooting of an unarmed black teenager in Missouri fueled interest in the company’s devices.
More than 18.8 million shares changed hands by mid-afternoon, in its busiest day in history, making the stock one of the most heavily traded in the Nasdaq. The move in the stock brought shares to levels not seen since October 2013.
Public outrage over the Aug. 9 police shooting of 18-year-old Michael Brown in Fergusson, Missouri has led a growing crowd to sign a White House petition calling for police to be required to wear cameras on the job.
It has also sparked increased interest in Digital Ally shares. At least 7.4 million shares traded in the stock in each of the last four sessions, but between August 2009 and June 2014, average daily volume was only about 13,000 shares.
Digital Ally’s video cameras sell for $795 and are compact enough to be pinned to shirts, belts or eyeglasses.
“We have had a lot more enquiries because of the civil unrest that is going on over in Ferguson,” Digital Ally Chief Executive Stanton Ross told Reuters last week.
Taser International Inc CEO Rick Smith told Reuters the estimated market for wearable video in North America is about $500 million, citing a Cambridge University study using Taser equipment.
Although wearable cameras only accounted for 9 percent of Digital Ally’s total sales in the June quarter, sales could surge as pressure mounts to find ways to hold law enforcement officials accountable.
In a Cambridge University study, complaints against a California police department were found to fall drastically after officers began wearing cameras on the job. Both suspects and officers were strongly deterred from violating rules when they were videotaped, the study found.
Still, up until this week, the recent gains in the stock had led many investors to bet against the stock’s rise. Heavy demand drove 68 percent of shares available to borrow being lent for short bets, according to data provider Markit, which watches short-selling activity.
(This version of the story corrects seventh paragraph to note that comments about the size of wearable video market come from Taser CEO Rick Smith, not Digital Ally’s Stanton Ross. This article was corrected earlier to show that the price of Digital Ally’s camera in paragraph five was $795 from $399 )
Additional reporting by Mridhula Raghavan; editing by Andrew Hay