TRADE ALERT: sell Moderna

20th May 2020 | Eoin Treacy

Action to take: sell Moderna
Ticker: MRNA US
Recommended at: $31.95
Sold at: $71.67
Profit: 124.32%

Moderna surged on positive news about the human trials it is performing for its new vaccine. However, the data it used to make the announcement was from a very small number of participants.

I think the market would have shaken that off if it were not for the fact that Moderna also decided to sell 17.6 million shares as well as make an additional offering of 2.64 million shares in what is referred to as a green shoe. That means the company has the option to over allot shares in the event of excessive demand. In other words, it just sold nearly 20 million shares.

The price for the new shares was set at $76. The share closed below that level yesterday. I am still enthusiastic about the prospects of a vaccine in the next six months, but I do not like the way in which Moderna deliberately boosted the price ahead of the announcement of a dilution of existing shareholders. That raises a red flag. I am recommending you sell the position and take the 124% profit.

All the best,


Eoin Treacy
Investment Director, Frontier Tech Investor

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