Moderna gives back part of yesterday's monster rally

Summary

Moderna shares fell into the $180s after closing near $204 following a sharp rally tied to melanoma vaccine developments with Merck. The speakers viewed the clinical progress positively but declined to chase the stock, citing its steep run-up, Citigroup's sell downgrade, and potential funding needs.

• Moderna dropped roughly 10% after the previous session's sharp rally.
• The speakers attributed the rally to phase-three developments for a melanoma vaccine partnered with Merck.
• Citigroup downgraded Moderna to sell, arguing that the good news was already reflected in the stock.
• The stock had climbed from about $65 in late August to above $200.
• The discussion cited plans to raise $2.6 billion to fund buildout spending.
• Neither speaker wanted to chase the rally despite enthusiasm about the vaccine program.
• Pete suggested another $40–$50 decline was possible and could create a level worth reconsidering.

1. 0:00

   The future yesterday looked pretty darn bright for Maderna, Pete, MRNA. Um, however, and the stock closed at almost 204 yesterday. It is down into the 180s today. So, that's kind of an ouch move

2. 0:14

   to the downside. And, uh, Merc partnered melanoma vaccine um, hit phase three and the stock roughly uh, moved up dramatically that day. Well, then all of a sudden you get uh you know, Croup deciding, you know what, we're going to

3. 0:32

   cut it to sell here because we think all the good news is out and maybe it's going to settle back in. Well, Cityroup has a lot of people that follow them and, you know, to see a 10% decline in just a couple, you know, ticks is uh not so great for the Madna shareholders. But

4. 0:51

   um would you be interested at this level, Pete? Are you thinking that maybe since it was just $4 off the 52- week high, you can understand why somebody, you know, this thing was 22 bucks in the last year, Pete. Yeah.

5. 1:05

   >> So, in other words, it 10xed. Uh so, I'm not in here to chase it. And I bet you're not either.

6. 1:11

   >> I'm not, John. And I I think the Yeah, you you said that exactly correctly. I mean, I'm looking at this thing in late August. Late August the stock was 65 and they come out with some great news.

7. 1:22

   Really, really great news. And it just absolutely ripped like you were just talking about to the upside. We were talking about the fact that, you know, it went from 65 to about 170. It kind of sat there for a little while. Went from 170 up to north of 200 bucks a share.

8. 1:37

   So, yeah. I mean, this thing to say that it's maybe a little bit overdone. I'm not sure I like the idea of the cell u that was put on them, but you know, it's understandable probably why they did that. Like you just said, I mean the 65 was in August, but there it was even lower than that, you know, not that long

9. 1:55

   ago. So, um you know what I think I think that this is unbelievably strong.

10. 2:01

    This whole phase three and the fact that they were able to get Merc involved with uh Madna and all that. I think it's great. We all are looking for as much as we can possibly can when these folks are, you know, putting together some of these various vaccines and so forth. And um this is a big deal. The new COO uh

11. 2:19

    wants to raise $2.6 billion dollar, John, to fund some of the buildout that they've got to do. So there is going to be some spend out there as well. So yeah, it makes some sense why it's kind of pulling back, not just kind of why it's pulling back off that 200 level. I wouldn't be surprised to see this even

12. 2:37

    come back a little bit further. But at some point in there, um, it's going to be overdone. And when it is, I think that's the time, and when I say that, I mean another like 40 or 50 points, which I think is possible. Um, that might be the time to start looking at this one again.

13. 3:00

    Down here.

Transcript from the show's YouTube captions; automatic captions may contain errors. Educational content, not investment advice.