Friday, January 30, 2009

Bookkeeping: Short Geron (GERN)


Geron (GERN) is an Obama hype stem cell stock; daytraders delight. The stock has been between $3 and $5 for the better part of the year but when Obama signed the stem call legislation daytraders rushed it. Once daytraders are done with it, I believe it shall collapse. This is "thesis" stock 101. There is no rational valuation you can put on a company like this; they will be lucky to do $1M in revenue in any quarter... it's "hope" and "promise".
  • Shares of Geron Corp. continued rising Monday, buoyed by the possibility that President Barack Obama might loosen restrictions on federal funding for embryonic stem cell research. The stock gained $1.06, or 15 percent, to close at $8.15. Shares hit $8.47 earlier in the day, their highest point in more than two years.
  • On Friday, the Food and Drug Administration cleared Geron's application to conduct early-stage clinical trials on its stem-cell based therapy, aimed at treating severe spinal cord injuries. The Menlo Park, Calif.-based company is the first to gain such clearance for embryonic stem cells, which are unspecialized cells capable of turning into a wide variety of other cells.
I'm shorting with a 3.5% stake in the $7.80s. The stock peaked today at $8.50, which is where it peaked Monday. I am going to give this one some room since it is volatile and full of people with a time frame of minutes - so I won't do a stop order right away but watch it. If it gets over $9, I'll probably sweat a bit...

My goal is that gap to fill in the $5.60s so I'm setting a limit order to cover at $5.80. That would be a tidy 25% gain from here.

Short Geron in fund and personal account

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