This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Sequenom Fails to Match Hype

SAN DIEGO ( TheStreet) -- Pop! Goes the Sequenom (SQNM) bubble.

Shares of the genetic test maker are down 17% in pre-market trading Tuesday following a year-end conference call Monday night in which Sequenom management declined to offer 2010 financial guidance, laid out plans to raise more money this year and failed to provide any new details about the development of a fetal gene test for Down's syndrome.

Sequenom's sober, conservative assessment for the year ahead did not live up to the unrealistic -- even fantastical -- expectations held by some investors who mistakenly believed the Sequenom's well-documented troubles were a relic of the past.

Some Sequemon analysts have helped fuel the hype, using fuzzy math to gin up sky-high revenue and stock price targets.

As it became clear that Monday night's conference call wasn't going to be the party some investors expected, they bolted for the exits. Sequenom's stock is down $1.34, or 17%, to $6.42 early Tuesday. The stock was down as much as 20% in Monday's after-hours trading and closed and closed Monday's regular session down slightly to $7.76.

Sequenom shares had essentially doubled in price from $4 to $8 this year in the run-up to Monday's financial results announcement.

Sequenom shares plunged last year after the company admitted that clinical data validating a non-invasive, blood-based fetal gene test for Down's syndrome were "mishandled" and therefore no longer reliable. A good portion of the company's management team was fired, including the CEO and head of research and development. Investigations by the SEC and FBI were launched and are continuing, and a class action lawsuit filed on behalf of shareholders is in the process of being settled.

Sequenom is still trying to recover from a disastrous 2009. On Monday, chief financial officer Paul Meyer would not provide any financial guidance for 2010, citing the ongoing litigation and government investigations as well as the uncertain commercial potential for its two new diagnostic tests recently launched.

One of those gene-based blood tests, which will allow expectant mothers to determine the sex of their baby earlier than conventional ultrasound, will not be reimbursed by insurance companies, Meyer acknowledged.

Sequenom closed 2009 with just under $43 million in the bank, a bit more than expected. But Meyer also admitted that Sequenom will raise more money this year. "We are currently in the process of assembling our preliminary plans to address this issue," he said.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SQNM $3.62 -0.96%
AAPL $126.41 -1.66%
FB $81.21 0.39%
GOOG $575.33 0.34%
TSLA $200.63 -0.89%


DOW 18,135.72 +38.82 0.21%
S&P 500 2,101.04 +2.51 0.12%
NASDAQ 4,982.8090 +15.6680 0.32%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs