Steer Clear of Affymax's Mysterious Pop

As many biotech investors noticed, shares of Affymax (NASDAQOTH: AFFY  ) exploded yesterday, up 54%, with an unheard of amount of trading volume. In this video, Motley Fool health-care analyst David Williamson unwinds some of the rumors that may have led to this stock's jump, and warns investors that taking a position in this stock right now isn't investing, it's gambling, and you may be betting on a very shaky horse.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 09, 2013, at 1:25 PM, Retaility wrote:

    I have a hard time believeing all of that volume to be attributable to investors gambling on rumor. Someone thats "in the know" just made a lot of money

  • Report this Comment On March 14, 2013, at 4:53 PM, shal112 wrote:

    When it comes to investing you have to consider the risk vs. reward\. Good companies, such as apple, are sometimes bad investments because they have little room to grow but a lot of room to fall,thus making the risk outweigh the reword.On the hand, bad companies sometimes are good investments because they have a lot of room to grow and little room to fall,thus making reward outweigh the risk.

    Now consider AFFY. Before the fall, it was a bad investment because of the risk involved.However after the fall, its a good investment because of its potential upside.

    In regards to the drug itself.The ratio of the problem was very low and comparable with other drugs.If they could figure out what causes the reaction and why, they could maybe save it.

    Now, no one is saying AFFY will recover over night,or to its previous value.Only that it has a lot of potential to go up from its present value.

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