The Instructive Case of Galena Biopharma

If you're in the mood for another reason why you should always be cautious about your biopharma investments, look no further than Galena Biopharma (GALE to its many clueless fans). I've been following this story over the last couple of weeks, and what a mess it is. Galena is a small company in Oregon with a few assets, including a cancer vaccine candidate. Its stock hovers in the low single digits, as is appropriate. But in December and January, it began to trade up, and up. From $2/share to $4. Then to $6, and then higher. And this on no particular news or change in the company's prospects, which for a stock like this is often a sign of "momentum" players getting involved. "Momentum" investing is a fancy name for "I'm buying this because it's going up", and the people who do this sort of thing are understandably anxious for you to buy some, too. They're also very, very unwilling to hear about anything that might cause the stock to go back down, because the proper direction for stocks, we must remember, is up. They only go down because of evil short bashers; everyone knows this. Adam Feuerstein of TheStreet.com delivered a great big dose of that evil stuff (known to the rest of us as "reality") on February 12 with this article, which showed why the stock had been rising. The company was paying a PR firm to beat the drums for it, said drum-beating going as far as having people post multiple supposedly-independent articles on sites like Seeking Alpha under a list of pseudonyms...
Source: In the Pipeline - Category: Chemists Tags: Business and Markets Source Type: blogs