written by reader Arena

By rippstudio, June 26, 2012

I’m a newbie and I got caught up in the Arena hype last week. Can sombody tell me what’s happening? From all the articles I read everything pointed to good things for the approval of their obesity drug. So why has the stock plunged so much? I don’t understand.

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Travis Johnson, Stock Gumshoe
June 26, 2012 4:33 pm

From what I’ve seen (and I haven’t looked that closely), there’s some analyst chatter about the potential cancerous side effects that have been known for a while in rats (Arena has said they won’t impact humans, I guess there’s some debate). So add in the fear that the FDA might again say, “come back in a couple years with more data” to the fact that the positive FDA panel report convinced investors that it was a shoo-in and drove up the price, and you get plenty of volatility. Tomorrow is the day we’ve been told to expect word, so I expect it’ll get interesting but I have no idea what the FDA will say — or even if they will respond tomorrow as they’re expected to.

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johnmike118
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johnmike118
June 26, 2012 8:32 pm

Hey Travis , I have read a lot of Arena material , and if I am correct the rat cancer issue has been thoroughly exhausted , even to the satisfaction of the FDA . I got in at $1.72
for 500 shares , was up $5000.00 profit until the price fell down below $10.00 , at which time , on the 25th and 26th I lost all sense of caution and said – ALL IN ! I now own 881 shares and am really in need of a small (like 5 or 10 dollar) raise in price tomorrow when the FDA does what I am expecting them to do .Beingt a novice trader I do not know what to expect , a big rise in price then a pull back , a ‘nice’ raise in price then a slow upward trend as they begin to get distribution under way , or – one of the thousand other possible scenios . Obviously I didn’t learn a lot in the past year as I am fairly sure that this – all in – strategy is not the safest way to prooceed , still , you have to spend money to make money , and I surely rolled the dice here , NOTwithstanding the fact that approval seems to be almost a certainty. Wishing you well , as I TRADE ON , and continue to enjoy and appreciate your siter and all the information you so freely give away . Thanks for everything you do for myself and everyone else , smart enough to make your site a must read , always ! john z (johnmike118)

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allennay
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allennay
June 27, 2012 4:31 pm

Well, for those who could play a position (buying in the low range of -$9.00) and weather the choppy waters of the morning trading, the reward came with FDA approval which sent the share value to $13,50, The price then dropped and consolidated in the mid $11.00 range. So, depending on your size of your position, you could have done very well.

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Ken
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Ken
July 4, 2012 4:35 am

So, why are post-approval prices now hovering around pre-approval values?

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