Once again, the big pharmaceutical companies are on a similar road to volatility as they have been several times over the past eighteen months.
Moderna, listed on the NASDAQ stock exchange under the ticker symbol NASDAQ:MRNA has been at the forefront of the veritable roller coaster ride that many of the big pharma stocks have been experiencing recently.
This means that for CFD traders, analysts and stakeholders alike, there has been a lot of action since Friday, when the internet, and most televised news channels across the world began to become overloaded with an extremely familiar series of reports which have been at the forefront many times since March 2020.
This time, however, it would perhaps be prudent to consider that the large drug companies with public listings on prominent exchanges in the United States or Europe would be less affected by news articles such as the ones which circulated on Friday November 26, largely because it could be that the market is already saturated and the world's public health officials have already bought as much from the major firms as they would be able to, as those who would have taken the offers of vaccines already having taken them, and those who do not wish to do so likely to stick firmly to their decisions at this stage.
However, an interesting direction appeared today after a trading session which spanned across the past three days, beginning on Friday, which resulted in a Moderna stock increasing from $273 per share pre-announcement on Thursday, a level which it had been sitting at for a number of days, to $371 by the beginning of the trading session in New York on Monday.
Let's stop to think about that for a short while. That is almost $100 per share increase in value in just over a day and a half, given that the markets closed on Friday for the weekend and re-opened on the Monday morning during which Moderna stock continued the rally which began on Friday!
This level of investor confidence is very interesting considering that it was purely based on sentiment that the news channels are once again reporting on a 'strain' of a virus, which means that the market for Moderna shares has been driven purely by speculation that Moderna would begin increasing its revenue by supplying boosters and mRNA vaccinations to government health departments, however what had not been made clear at the stage during which the stock rallied was the internal view from within Moderna.
Now the sentiment is in absolutely the other direction, with even the most mainstream of reports beginning to consider that the markets will fall after Moderna's announcement that the company's CEO has his doubts regarding the effectiveness of vaccines against the new Omicron Covid variant.
Whilst there has been no sudden crash, CEO Stephane Bancel told the Financial Times he thought there would be a "material drop" in vaccine efficacy and that has stagnated the rising value of Moderna stock significantly.
Today, as the US trading session opens in New York, Moderna stock is down to $327 per share.
Yes, this is still significantly higher than the $273 it had been languishing at for some time last week, but is still a downturn compared to its huge rally during the early part of the week and Friday last week, which was purely based on the idea that suddenly huge consignments of the Moderna product would be bought by Western governments.
Here is the takeaway: Speculation in this case led to a rally, but this was before any internal message had been conveyed by Moderna's board, and now the unexpected message has come forward, the markets have done what usually happens when uncertainty sets in; retract.
One thing's for sure, that being the clear notion that logic is not the same type of logic as it was even six months ago, let alone before March 2020!