Exuberance Over Good News Drives Bionano Genomics’ Wild Week
John Alford, 04 January 2021
Bionano Genomics, Inc. (BNGO) has been on a wild, meteoric rise in the past few days, and after hours on the 31st it continued to skyrocket, rising to $4 a share. On the 31st of December alone, counting market and after-hours trading, share prices surged $1.90, almost doubling. This capped a wild week, and is a momentum-driven mania trade not based on the previous performance or long-term trend of the company. While recently reporting one good report (via a paid PR service), there are obvious issues surrounding the company to the investor that takes the time to evaluate their most recent 10-Q, recent and potential massive dilution, and decreasing revenue.
Since Bionano is a local company here in San Diego, California, I’d love to see them succeed as part of our bio-medical industry and this article isn’t a negative critique of their business or technology. I’m not qualified to evaluate medical technology, although this is a second article after writing on 10X Genomics (TGX) recently. Instead, my purpose is to illustrate how momentum traders seizing on a stock, pushing the price up and commenting wildly on message boards (even here on SA), and huge volume spikes can quickly divorce a stock’s price from its underlying fundamentals. For a nimble trade profits can be made – I admittedly found out about this stock doing just that earlier this week – but long term, the stock price is well ahead of the business prospects for Bionano Genomics.
