Good observation on the float going from 5.7M to 10.1M. All that means though is that a lot of closely held shares got cut loose and were put into play, which isn't surprising given the huge run up. IMO anyone who was in this stock in the single digits who didn't dump it in the $20's or high teens is truly clueless, especially with the volume and liquidity it had. If you are truly interested in being long in it, there is ample time to buy back in again after it dropped.
Also, CHIP, you seem to forget the simple rules of supply and demand. When the demand goes up due to hyped up news that sounds better than sliced bread, then the price goes up as the masses run to buy the little bit of supply of stock available ie) 41M trades of 10M shares of stock. Once the demand drops off, so will the price. It is about as simple as it gets. There is no way this stock maintains 7 figure volume for long, the volume will drop back towards its traditional levels, and so will its price. Now, assuming GERN was fairly valued at $7.50 before this recent announcement, then in theory it should not fall all the way back to $7.50, but should maintain some additional research premium. But, this too will depend on macro factors, etc...
Also, the reason the price has stabilized today is that tons of shorts are covering and moving on to other fast moving stocks to trade. Their buying created demand which propped up the price for the short term. As they move on, the buying demand will decrease, and the selling by the longs who bought way too high (ala our Bald Martian Friend - OUCH@#$#^%@#$) will continue to put a downward pressure on the stock. In the meantime, the momentum players are in EBAY and KTEL and the like.
As far as a big Pharma deal popping up all of a sudden to create more revenue in the next couple of weeks. No way, they take way, way too long to negotiate, and you can bet GERN will shop the deal around to get the best price and drag it out further. There is no hurry for them, this is long term stuff in their minds. I could see a deal in 1st or 2nd Q of 1999 maybe. Hell once they even agree on terms the damn lawyers will take 6 weeks to work up the papers.
GERN IMHO will be heading lower. I put in a BUY LIMIT to cover my shorts on the VD Model Portfolio at $9. I figure that will fill sometime in the next week or so.
Rman |
