Investing is sometimes like betting on horse races. You take all the information you can get, synthesize it as best you can, and figure out if the potential payoff outweighs the risks.
Unfortunately for investors in Sequenom
What we do know is that the company cleaned house on Monday night. The president and CEO, Harry Stylli, and senior vice president of research and development, Elizabeth Dragon, were fired. Its chief financial officer, Paul Hawran, and Steve Owings, the vice president of commercial development for prenatal diagnostics, resigned.
The changes stem from the announcement in April of "employee mishandling of R&D test data and results" for its Down syndrome test. I've got no problems with heads rolling, and if the CEO needs to be fired for a lack of oversight, then so be it. The chairman of the board, Harry Hixson, who was formerly the chief operating officer of Amgen
After the haircut yesterday, the company's shares closed about the same place they did when the scandal first broke last spring. Essentially, we're back where we started.
Despite rapid changes in the stock price, we never really left. Investors are still completely in the dark about what exactly "employee mishandling" really is. There's still an ongoing Securities and Exchange Commission investigation, so I guess it's understandable that the company might want to keep its mouth shut.
The bigger problem for investors is that they're equally in the dark about the path forward. No further timeline was given for getting the Down syndrome test to market, or even when we could expect initial test results. Beyond what the company has said earlier, that is, which hasn't been much.
Uncertainty can lead to outsized returns -- witness American International Group
Call me a wimp if you will, but for that reason alone, I'll continue to sit this one out.