>>ENMD . . . just think that only a few months ago it reached 85.00.<< Yeah, for about a nanosecond. This was never a serious investment vehicle.
This nanosecond was in response to the infamous Sunday May 3 NY Times front page article and a lot of TV coverage of the story (which had nothing that was new to those who followed the company and who were aware of the NEJM article in November 1997 - nothing new except a quote from a Nobel Prize winner to the effect that Judah Folkman will cure cancer in two years, a statement he later denied he'd made).
On Monday, May 4 ENMD opened at 83, ticked to 85, was down to 76 by 9:32 AM when my shares were sold, bounced off 40 or so, closed the day at 50 ¾ and closed the week at 33. From there it drifted down to establish a trading range of about 20 - 35, until yesterday's news and today's 50% plunge (which I'm surprised isn't greater; probably will be by the end of the day).
As you say, TexasDude, none of this is any good for the biotech sector. A lot of less-experienced investors got burned by the hype, and the headlines will further suggest to others that biotech is no more than a crapshoot, little different from the internut stocks whose crash many will be fleeing, looking for a home for their money. This ENMD story will surely discourage some of those refugees, and a lot of other investors, from shopping in the biotech sector, and thus hurt the deserving companies' ability to raise capital.
Part of the problem is of course that most investors, even so-called professionals, have no clue about the underlying science, which takes a lot of effort to understand and get comfortable with, so most investors never get comfortable; this sort of nonsense just erects further roadblocks to people seriously considering buying a biotech or a handful of biotechs.
I blame much of the current debacle on the hypesters at ENMD, although the New York Times reporter, Gina Kolata, also has a lot to answer for.
BTW, in addition to the ENMD, GZMO and VD's Model Portfolio threads, where you'd expect it, there is some interesting discussion of the ENMD bust on the CELG thread: Subject 7383 , starting with MZ's post #250.
--RCM |
