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Strategies & Market Trends : Ask Vendit Off-Topic Questions
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To: Jill who wrote (5388)2/26/2005 12:39:09 PM
From: Walkingshadow  Read Replies (2) of 8752
 
Again, "huge success" is defined in different ways, and does not necessarily mean financial success or increased stock price. In fact, you can and do have situations where success in human terms or benefit to society does not equate to financial or business success.

For example, let's say VXGN happened to finally be successful in developing an HIV vaccine that really worked. Now, you and I might think that is hugely successful because it benefits mankind.

But the markets might take a much different approach to defining success. HIV is a disease that predominantly affects third-world countries that have little or no way to pay for a vaccine that their people desperately need. So if you are VXGN, you might end up with a huge market of people that you will be forced to more or less give your product away to. Anything else might be considered immoral or even illegal---witholding product would be tantamount to blackmail and/or extortion. The U.N. or the W.H.O. or the Red Cross might kick in what funding they could to help out. But even at that, little benefit in terms of profits might well be the result. How might the market value such a company?

So if you are a shareholder, you might well end up owning shares in a company that is hugely successful to mankind, but hugely unsuccessful to you personally, in financial terms.

The Street in interested in profits, not clinical benefit per se. Sometimes the two go hand in hand, other times there is a wild mismatch.

T
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