Speculative appetites turned voracious Monday with stunning gains in a handful of security-related issues, led by one-time dot-com darling IPIX ( IPIX).

Over the past month, shares of the company formerly known as Internet Pictures have skyrocketed 900% to just under $24 a share, boosting the company's market capitalization from under $25 million to roughly $220 million.

In Monday trading alone, shares of San Roman, Calif.-based IPIX were rising $8.49, or 55%, to $23.99. The stock was the most actively traded on the Nasdaq Stock Market with more than 50 million shares changing hands.

To put that frenzied action in perspective, consider that back on March 12 shares of IPIX were trading at $2.36 on a daily average volume of fewer than 100,000 shares.

The company, which markets a sophisticated video surveillance system, is the latest darling of daytraders and speculators bidding up shares of low-float stocks, especially ones in the security sector. IPIX joins a list of other small security outfits like ICTS International ( ICTS) and Mace Security ( MACE), which were up 71% and 136%, respectively, Monday; and other recent highfliers like Arotech ( ARTX) and Magal Security ( MAGS).

The group is soaring in the wake of renewed terrorism jitters, as investors fear the increasing carnage in Iraq could lead to new terror attacks in the U.S. and Europe. It's also a case of investors hoping to catch lightning in a bottle and find the next Taser International ( TASR), the stun-gun maker whose stock is up 2,300% on a split-adjusted basis since last summer.

Monday's is just the latest of several speculative waves to sweep the small-cap universe this year. Other low-float darlings that already rallied this year are medical tech company Vaso Active Pharmaceuticals, garbage hauler Industrial Services of America ( IDSA), oil drilling manufacturer Unifab ( UFAB) and Internet search engine Mamma.com ( MAMA).

The only thing many of these companies have in common is their low floats -- in most cases just a few million shares outstanding. With so few shares outstanding, it doesn't take much to push them higher.

Away from terror zeitgeist, few fundamentals explain these eye-popping gains. The shares rise after the companies report stock splits, slim quarterly profits and the sale of convertible notes to hedge funds. For investors, that should be a warning that these stocks could fall as quickly as they rose.

Indeed, a number of low-float rockets have burned out or given signs of big trouble. On April 1, the Securities and Exchange Commission suspended trading in shares of Vaso Active after finding it may have made misleading statements about its products. Last week, Mamma.com announced the SEC is investigating potentially unusual trading activity in its shares. Unifab recently disclosed in a regulatory filing that "the company must experience a marked improvement in 2004 in order to remain a going concern."

Of course, a similar concern about IPIX's financial health has done nothing to cool off that stock. In the company's recently filed annual report for 2003, IPIX says it has an "accumulated deficit of $504 million." Last June, IPIX ended a commercial agreement it had with eBay ( EBAY). The online auctioneer had accounted for 87% of IPIX's total revenues in 2003. The company hopes to replace those revenue with sales of its new security-related product, but warns investors there are no guarantees.

"Additional capital or strategic alternatives may be required for us to continue our operations and as a result, the independent auditors' report includes an explanatory paragraph that states that significant matters exist, including the change in the relationship with our largest customer, that raise substantial doubt about our ability to continue as a going concern," the company's March 30 filing says.

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