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All things considered, mainly because of the Iseq being down 113 today, I got to thinking about Elan. For those of you that don't know the story, Elan shares were as high as 22 in early 2005 because of an MS drug they were introducing called Tysabri. The company was thriving and one of the strongest in the market, until a patient died during a trial of the drug later that month. Shares then plummeted by 69%. Ever since they have yo-yoed to the point that one month cannot be predicted from the previous month's results. They have been as high as 15 last June and dropped below 10 in the first few days of this year.
The question is, could it happen again?
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I would stay well away from ELAN., lost a lot of money on these, they have a great ability of surprising shareholders with good and bad news
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- CommentAuthorpintofplain
- CommentTimeJan 10th 2007
I put Elan down to mitigating circumstances, poor research and plain old bad luck because it isn't clear whether the drug did cause the death. A mixture of these contributed to its downfall. Whilst I wouldn't touch Elan with a barge pole, I think many lessons were learnt from it and would be very surprised to see it happen again to another company. -
I feel your pain mumble. It lost many of us our hard earned cash. I lost a small fortune. No matter how high the shares rise I would never go back there again because of the contradictions that seem to come out of Elan within days of each other. I hope that pintofplain is right in his assessment that it wouldn't happen again because I'm not sure the Iseq could sustain it.
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I saw a post on one of the other topics describing Anglo I think. It pointed out that the company had strong leadership and management. That is exactly what Elan don't have and have never had. I'm not sure it would happen again because the circumstances were unique, but if it did it'll be a company with similar management and similar yo-yoing stock value.
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- CommentAuthorbigspender
- CommentTimeJan 11th 2007
The stock had rocketed before the drug was ever placed on trial which should have rang some alarm bells really. I admit that I invested in Elan stock, but in hindsight should have waited. It was a risk to release details of the drug to the world before it was approved and labelled safe, which was poor management on their part, but the herd mentality took over. Just goes to show that there is no such thing as a safe investment. -
So you don't think that there are any companies out there that could possibly fall prey to the same rollercoaster ride again? I can't believe that Elan shares are still hitting good heights in the Iseq to be honest. After everything that happened the shares still haven't stabilised yet they are regularly bought and sold. Maybe I'm missing something.
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- CommentAuthorpintofplain
- CommentTimeJan 12th 2007
Not at the moment, no. Give it a few months and maybe there will be a possible victim because nobody seems to learn from the mistakes of others in the world of investment. There is temporary caution and then it gets thrown to the wind, but then again maybe other companies wouldn't be so eager to announce a wonder drug that hasn't been approved yet! -
I think that Elan was good for one thing - it has given more people the ability to judge when to get out. If the share value drops dramatically then most people who held Elan shares would get out instead of buying more. The lesson was hard but may just prove to be valuable. Holding your nerve and being stupid are two very different things.
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I disagree. I think that investors are generally still blinded by the possibility of getting rich. No matter how many experiences like the Elan fiasco each one has, a high percentage would risk the same again in case it turned out differently. Very few learn from their mistakes unless they are of a cautious nature and don't want to risk their money, in which case they're not likely to be investing in stock at all. All investors must have gambling in their nature to prosper.
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The fear of losing is enough to encourage investors to jump from sinking ships. Some investors are cautious and do prosper. Some will never learn regardless of the experiences they have, I grant you that, but experience is a valuable thing for those that have the wisdom to learn from it.
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