4 ms·
The company didn't lose $400M; the aggregate market value of the stock fell by $400M (or more usefully, 15%) . . . and I am not even sure I understand why. The
by goodcanadian 10y ago
The company didn't lose $400M; the aggregate market value of the stock fell by $400M (or more usefully, 15%) . . . and I am not even sure I understand why. The tweet, if accurate, should certainly make people mad at the company, but it doesn't necessarily have any effect on profitability. Selling the stock seems an odd way to punish the company.
- callesgg 10y agoStock value on the stock market has very little do with a company's profitability. It has to do with what stock owners think that other stock owners will do with their stock.
- kauffj 10y agoThe government has shown a tendency to selectively pursue pharmaceutical companies when there is public outrage, most recently with Shkreli and Mylan. Selling the stock isn't done to punish the company, it's a reaction to the fear this will happen to Ariad as well.
- goodcanadian 10y agoThe thought had occurred to me, and perhaps, you are right. However, 15% is a pretty large speculative jump based on one little tweet. I admit that I do tend to take a longer view of these things than the typical trader (and frankly, I would never have owned this stock in the first place).