Biotech Investors Waving Bye-Bye as Another Selloff Unfolds

Hang onto your seats -- it could get uglier out there in the wild world of biotech.

With brutal efficiency, investors Monday slashed biotech shares for the third day in just over a week, in the absence of notable sectorwide news. The selloff swiped a third of the market capitalizations of some companies, as though some giant vacuum cleaner had sucked the hot air out of a great speculative biotech bubble. Faced with collapsing share prices, some investors said they were snatching up newfound bargains even as they admitted the bottom may not be in sight.

"It's just capitulation," says Stuart Weisbrod, chief investment officer for Merlin BioMed Group, a New York-based hedge fund with about $400 million under management. "All the fast money is just selling and selling ugly." ...