Barack Obama's latest pledge to dismiss old George W. Bush legislation barring federal funding from embryonic stem cell researchhas galvanized this unique slice of the biotech sector. The proposal expands the research and development trough from venture and private capital to the limitless pockets of our U.S. Treasury. Stem cell research is the latest movement to captivate Wall-Street.
Fortunes have already been bankrolled courtesy of the rhetoric.
Stem Cell Stocks Skyrocket on Obama Policy
Geron Corporation (NASDAQ GM: GERN) is the first company to achieve government approval to initiate human embryonic stem cell therapy and shares exploded to a 16.54% gain - the Monday, March 9, 2009 of the Obama announcement. Stemcells, Incorporated appropriately features the symbol STEM and also launched itself upwards by 43%. Of course, both stocks trade for less than $5 and carry market valuations under $500 million.
The entire stem-cell / biotech complex has emerged as the latest arena for hyper speculation since Election Day. The gains are unreal and based upon hopes and prayers - rather than any form of material production. Geron, for example, has oscillated sharply from $80 to $1.95 over the past decade with every newfangled "breakthrough" research introduced, Democratic congressional seat won, and Barack Obama stem cell stump speech.
Avoid Stem Cell Stocks
Despite the legislation and ferocious gains - I would advise against wading into this boom and bust arena. The majority of stem cell stocks are micro-caps, carrying market capitalizations of less than $50 million and by nature are privy to wild price swings at-best and blatant market manipulation at-best. Certainly, the amount of individuals that maintain true knowledge of this stem-cell research endeavor are few and far between.
Choosing to invest in Micro-cap shares with no profits that rely upon the passing of controversial legislation to erect a fledgling, monetized industry out of nothing and based upon complicated scientific theory is a recipe for complete disaster.
Stem Cell Stocks Skyrocket on Obama Policy, Sources:
The Associated Press, Obama Signs Order Lifting Restrictions on Stem Cell Research Funding, http://www.foxnews.com/politics/first100days/2009/03/09/obama-lift-restrictions-stem-cell-research-funding/
The Associated Press, Stem-Cell Stocks Gain on Sentiment for Ban Removal, http://www.forbes.com/feeds/ap/2009/02/17/ap6061286.html
Stemcells, Incorporated, http://www.stemcellsinc.com/
stock promoters
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