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(Bloomberg) -- A massive jump in the shares of a Brazilian waste management company has vaulted its founder into the ranks of billionaires in the South American country.

Shares of Ambipar Participacoes e Empreendimentos SA have soared over 930% since hitting a record low in May. The hard-and-fast rally has puzzled traders, who see little fundamental reason for the move. Some point to recent share purchases by founder Tercio Borlenghi Junior as well as Trustee DTVM, which now holds a 15% stake. The buying pressure could be fueling a short-squeeze on the stock, further amplifying the gains.

Whatever the cause, the surge made Borlenghi Junior very wealthy, at least on paper. The company’s 13.9 billion-real market capitalization makes his 73% stake worth 10.1 billion reais, or $1.8 billion. The 54-year-old executive founded the firm in 1995.

Veteran Brazilian investor Nelson Tanure has also been buying up Ambipar shares through Trustee DTVM, according to a person familiar with the matter, who asked not to be named discussing private information.

The bulk of the trading in the stock in the last few months has been done through mid-size lender Banco Master, according to data compiled by Bloomberg. Tanure, known for investing in distressed assets, recently partnered with some of Banco Master’s key shareholders for some business dealings, the person added.

Borlenghi Junior has “no desire to take the company private,” Ambipar CFO Joao Arruda said in an interview. The company declined to comment further, as did Banco Master. Trustee didn’t reply to a request for comment.

Ambipar, which operates in 39 countries, is actively trying to cut its debt load and has unveiled a share buyback plan which some analysts point to as supportive of the bullish sentiment. The company is confident that it will reach its goal of 2.5 times net debt/Ebitda ratio faster than its mid-2025 deadline, according to Arruda.

Consolidated leverage was 2.82 times net debt/annualized Ebitda in the second quarter, down from 3.10 times in the previous three months, according to an earnings release published August 8.

“We are leaving behind that acquisition spree,” Arruda said, a reference to more than 50 M&A deals the company completed since 2020. Ambipar expects to see sustained, organic growth going forward, he added, which should lead to higher margins and profits.

Still, the rally has begun to fuel concern.

“It’s a very atypical move,” Gilberto Coelho, an analyst at XP said in a livestream on Friday. “It’s starting to get worrying.”

The rapid rise in the shares left analyst price targets in the dust. The shares trade at 82.99 reais a piece, far above the 12-month price target of 22.72, according to data compiled by Bloomberg. Ambipar shares have five buy recommendations and one hold.

Short positions on the shares have been declining, which could further signal the move will fade, according to Mateus Haag, an analyst at Guide Investimentos. Short-sellers, who borrow the stock and bet that the price will fall, can get squeezed if the shares rally. Investors then have to rush to close their short positions by buying the stock to limit their losses.

The pullback had begun earlier this week, when Ambipar fell 36% combined on Tuesday and Wednesday. But the shares rallied back 19% on Thursday.

“There was no positive driver to justify the rise, but rather a speculative move,” said Mateus Haag, an analyst at Guide Investimentos. “It is very likely that, in the coming months, the stock will fall as much as it has risen.”

--With assistance from Raphael Almeida Dos Santos.

(Updates share move throughout.)