To: Russian Bear who wrote (5881 ) 11/6/1998 5:01:00 PM From: Rocketman Read Replies (2) | Respond to
RB, I think it is tough to predict GERN on Monday. While I don't think the traders are going to let it die, I'm not sure it is going to go up enough for the Model to do anything more than sit on the short we've got. I could see a gap up in the AM as the weekend papers and such beat it to death and the uninformed, widows and children buy a long term investment at ridiculous prices on market orders at the open. You know damn well the market makers will work this opening again. They did some instanet trades at $26 before this mornings open, and put it out as a press release (how often do you see instanet go out as press releases?). I'd be curious to know how many shares traded at that price, my bet is not many. Seems like a great way to justify an outrageous opening price and getting the juices worked up of those who would put in market orders at the open. It actually traded above the $22 open for a little bit today, but not much for not long. I was a bit surprised that it had the double peak and went back to and above the open, but figured the 20 minute delay crowd were calling their brokers about then. I was tempted to do some day trading with it, but I know V1 really doesn't like that and the bookeeping would drive CYTO crazy. I can just see him cursing me as he had to enter and calculate 20 trades in one stock in a day. 41.3M shares of GERN traded today, with a float of 5.7M. Definitely not your long term investors playing with this one. There are still some true believers out there that think that this stock will continue to run up big. No way. My only fear is if GERN does a big corporate deal that brings in mega bucks. I could see that over the long haul, but the attorneys don't work that fast, and I doubt they do it closely on the heels of this. If they had a deal ready to go, I would have expected that it would have come out as part of this announcement. Like ENMD, this is great research results, and like ENMD it is a long long way from making any money and will require many tons of cash to exploit, thus like ENMD the current run up is unsustainable and gravity will prevail. The issue then becomes, what is a good price to cover at? I really think this will go back under $10 when the traders move on to bigger, better and hotter things, but not back to its prior to run up $6. If GERN has their act together, they'll announce, price and sell a secondary on Monday to raise some cash at an outrageous price, but not sure if the SEC would smile on that....something about quiet periods would kill that. Anyway, most importantly, I had fun doing this one. I like this kind of stuff. I know Rick Harmon thinks that these sorts of things are bad for the sector, but I'm not so sure of that. The press exposure of the technical breakthroughs are definitely good for the sector. Granted there are a few widows and orphans who get hurt, but their numbers are small and they don't get the press to hurt the sector. The winners are the day traders, short sellers, options players and the market makers who all clean up, oh and the long term GERN investors who sold their cheaply purchased shares today and will rebuy them back in a couple of weeks. I still think the press to the biotech sector about the technology will outweigh the negative press on the volatility and help the sector as a whole.
