Talk about violent mood swings - take a look at the chart above for Dendreon (DNDN). Over a 24-hour period, traders piled out of the stock as fast as they could -- and then, the next day, piled into the stock almost as fast. The key trigger was a 2pm announcement that the company had a cure for prostate cancer. Ahead of the call, nervous investors began to unwind their position in the stock -- so fast, in fact, that Dendreon shares literally fell from $25 to $7.50 in a matter of minutes and NASDAQ halted trading in the stock with shares of DNDN trading at $11.81. The 2pm announcement went off without a hitch (with trading in DNDN still halted). The next day, trading resumed and the first trade was at $26.82. Business Week provides a full recount of what happened, minute-by-minute, and surmises what might have triggered the "mysterious" trading in Dendreon.
Could it have been a "Trading Places" scenario? Or something more along the lines of the recently-released movie "Duplicity" (in which two rival corporations play a cloak-and-dagger game over a cure for male baldness)? Or, as one commenter on the Business Week article pointed out, maybe the bear raid on Dendreon had something to do with a mysterious message placed on a Yahoo message board. One thing is clear - a lot of people had a lot of money at stake on Dendreon's cancer cure. On Seeking Alpha, one analyst was so bullish on DNDN that he predicted the company was actually a $360 stock!
DISCLAIMER: Any strategies discussed and examples using actual securities and price data are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. In reading content in the Trader Network or elsewhere on the TradeKing Website, you may gain ideas about when, where, and how to invest your money. Although you may discover new ideas or rationale that may be compelling, you must ultimately decide whether or not to put your own money at risk. Consider the following when making an investment decision: your financial and tax situation, your risk profile, and transaction costs.
