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Sequenom Inc. Message Board

  • techystock techystock Jun 29, 2009 1:24 PM Flag

    Risk/Reward ratio are different for different investors.

    There is a small chance where the 4 employees committed a fraud by making up test data and benefit from the companies stock/options trading. Well, what's the possibility of 4 employees trying to manipulate their companies stock by faking the data? I think the chances are really low because they know a larger independent trial from John Hopkins will either validate or invalidate their data. If the companies small trial is good and John Hopkins trial is bad, don't they know their fraud will be exposed? So it's impossible for anyone with a reasonable mind to commit a stupid crime like that! But there is always stupid people, so lets said the chances of a stupid fraud is 5%.

    Lets say there is 5% chance of SQNM losing 75% of its value from here.

    For some investors, the 5% chance of losing 75% of their investment is unacceptable! Remember, you can always make money elsewhere. Especially fund, for them, there is 5% chance of destroying their career if they invested in SQNM and watch it blow up in front of their face. Even if they have 95% chance of making money (which doesn't go into their pockets anyway), so the risk/reward ratio work against them. Shorts are taking an advantage on this fact when they believe there is no immediate news.

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    • that's why shorts aren't covering as of yet. Every day that passes,and it's been awhile now,means news is very close now imo. Plus ppl are trying to buy lower now thinking same thing.3's is a steal. Good post btw

      • 1 Reply to jd5216
      • It will be the so-far-out-performing money managers because they have the spare change, the short selling hedge funds, and the risk taking investors.

        Why I say the shorts will be making money? Because they will all covered on SQNM's way up and going to reverse their positions. They will put their short gains back to work on SQNM.

        So in summary, the biggest losers will be those long term investors and some fund managers who sold SQNM on top of the bad news, e.g. RibBack. The biggest winners will be the shorts which will reverse their course shortly.

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