
Sanders tweet causes drug company to lose $400M in a day - lnguyen
http://thehill.com/blogs/blog-briefing-room/news/301128-sanders-tweet-causes-drug-company-to-lose-400m-in-a-day
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goodcanadian
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.

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kauffj
The 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.

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goodcanadian
The 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).

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maxerickson
The valuation of the stock of the company declined by $400 million, which was
15%.

In business parlance, the company didn't lose any money.

This article does better with the jargon, names the drug, discusses the amount
of the price increase and includes a chart of the stock for the day:

[http://www.businessinsider.com/ariad-pharmaceuticals-
stock-d...](http://www.businessinsider.com/ariad-pharmaceuticals-stock-
dropping-after-bernie-sanders-tweet-2016-10)

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brianwawok
Right, which means savvy investors will buy at the dip and make 400 million
over the next week.

You need laws to stop this stuff, not tweets that lower stock value for a
week.

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throwanem
Uh, how come? This hardly qualifies as trading on insider information, after
all.

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maxerickson
I believe they mean that there is an opportunity to improve the regulatory
system surrounding prescription drugs in the US, that a Senator tweeting
doesn't represent much of anything compared to legislation.

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brianwawok
Exactly. A tweet has no lasting impact on the stock price. The stock price
will adjust to some multiple of yearly profit, adjusted for the overall
climate, adjusted for the industry, adjusted for the growth rate.

