It's the sort of thing that just has to catch your eye: Moderna, the Covid 19 Vaccine maker lost an incredible 31% of its value this week. That's $43 billion wiped out in a single week, more than half of that on Thursday alone.
So just what's happening to the former darling of Wall Street, the can't-miss company, producing the most in-demand product in the world?
Something doesn't add up here, and I thought we should take a closer look.
The Moderna story began back in 2010 when a couple of Harvard Professors got together to form a company built around the new biotechnology of Ribonucleic Acid or just RNA. One of the building blocks of life. Deriving their company name from Modified RNA, they came up with the name Moderna.
Flash forward to the Covid Pandemic, and Moderna was able to get the second Emergency Use Authorization for their Modified RNA Injection. Loosely called a “Vaccine” this really represented an entirely different technology.
Approved, as we said under a EUA, emergency use authorization, by the US, most other countries in the world followed suit. And wah-la Moderna was off and running. Suddenly producing the most in-demand product in all the world.
No less an authority than Bill Gates declared that the “vaccine” should be administered to the entire world population. Over 7 ¾ billion people. And Moderna was one of only 4 companies producing the EUA approved vaccine.
Needless to say, Wall Street was ecstatic. They had found the “Holy Grail” of health care. A product that everyone urgently needed, and had the potential for worldwide distribution.
You could see the wheels turning.
Moderna began this year at slightly over $100 per share, by August it has reached nearly $500 a share. Joining the S&P 500 in June, and becoming its best performing stock at almost the same time.
It was a trader's dream come true.
And then a strange thing began to occur with Moderna Stock. It started to decline.
At just the time that things should really get going. Suddenly Moderna stock went lower and lower. This past week is only the latest move, in what is by now a well-established downtrend. From an inter-day high of 493 in August to an inter-day low on Friday of 210. A more than a 50% correction in Moderna in just 3 months. And a clear indication that Moderna has been in its own bear market.
Now the conventional wisdom on Wall Street is that this decline has been due entirely to Moderna's inability to produce enough of their Vax.
And that made perfect sense. At their Quarterly Earnings Report, Moderna did indicate that they would not make their yearly goal of producing a billion doses. In fact, they might only make 700 to 800 million doses.
This was because Moderna doesn't have the production facilities of say a Pfizer. Pfizer with its worldwide production and distribution is able to far outstrip newcomer Moderna.
Pfizer is the real model of how these Vax's should be produced and distributed.
So, if Pfizer is the model of how the Vax should be produced and distributed, I thought it made sense to take a look at how Pfizer's stock was performing. After all, Pfizer also had this incredible product AND the ability to deliver it to the marketplace. Something Moderna lacked.
And here in the charts was the second real puzzle.
Pfizer's stock chart looked almost exactly like Moderna's. A big rally from June through August. But then that same big decline beginning in August.
To be fair Pfizer's chart does have a counter-trend rally beginning mid-October, but that seems to be over now, as on Friday Pfizer dropped below its 50-day moving average.
So what's going on here. Why are these two principal Vaccine Producer' stocks both declining at just the time things should be moving into high gear?
Just a note here, I'm leaving out Johnson And Johnson, because it's such a well-diversified company. Although it does show some of the same trends, it's much more muted because of its portfolio of additional products.
So here we have two principal vax producers, Moderna and now Pfizer, whose stock is declining just when you'd think they would be rallying.
Could it be the average consumer of this product has changed their mind, on just what's its effectiveness is?
According to the Website: “Our World In Data dot ORG” deaths from the Covid Virus peaked in May 2020. By August of last year, the Covid Death Rate was only half of May's rate. And by January of this year, only half of August rate.
In other words, the risk from Covid Death is falling.
At the same time, the risk from the vaccine seems to be rising. According to the Vaccine Adverse Events Reporting System, there have been over 4,400 deaths from the Moderna Vaccine and over 12,000 deaths from the Pfizer vaccine.
Now the academics may argue and argue over the relative importance of these numbers. But one simple fact is emerging: consumer PERCEPTION is changing.
A vaccine that was once considered 100% safe and 100% effective, is now being seen as less safe and perhaps even less safe.
What I'm saying is the MARKET is changing. After all the vaccine is at its core a healthcare product. Not unlike any other pharmaceutical product.
And its success or failure will be measured in its acceptance in the marketplace.
And right now these drug companies, along with the CDC and the Federal Government are using some of the worst marketing efforts I've ever seen. Using unconstitutional demands, and trying to bully people into taking your drug. Is a sure way to get the American people in full revolt. Treat me like a child, and command I do something: that does not promote goodwill and more “sales.”
The distribution of the Covid vaccine depends on the ability of the Government and Agencies to convince the American People that taking the Vax is in our best interest.
That “sale” has not been made.