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) -- In upgrading



to a "buy" from "hold" Tuesday morning, the Cantor Fitzgerald analyst uses some very fluffy financial assumptions and questionable accounting.

It looks to me like Pamela Bassett came up with her new, super-bullish $16 price target for Sequenom first, then worked backwards in her financial model to justify it.

The income statement attached to her note Tuesday projects Sequenom total revenue of $49.3 million this year, zooming to $279.5 million in 2011.

Wow! It would be impressive, indeed, if Sequenom somehow managed to grow total revenue by more than 460% in a year, especially since the company's most important revenue generating project -- a blood-based fetal gene test for Down's syndrome -- doesn't even exist at this point because an earlier, much-hyped version blew up last year.

More recently, Sequenom announced plans to launch a gene-based test to determine fetal sex. But expectant parents have been using ultrasound tests to find out whether they're having a girl or a boy for decades. It's highly unlikely that an expensive and unreimbursed gene-based test is ever going to catch on commercially.

Bassett doesn't offer much detail to justify her lofty revenue projections, except to say, "Sequenom's commitment to launching its next-gen MassARRAY platform will be a key driver of long-term growth."

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What she does do, however, is use her $279.5 million in 2011 revenue to project Sequenom earnings of 63 cents a share in 2011. Those 2011 earnings come off a basic share count that grows less than 1% from 2010 levels, despite the fact that Sequenom's new management team has already stated the company needs to raise money.

I'm not naive enough to believe that Bassett's fuzzy math and ridiculous projections mean anything at this point. She's just feeding the stock's

momentum-fueled frenzy

. Sequenom shares are up 22% to $8.43 Tuesday; the stock has doubled in price so far this year.

With a valuation now topping $500 million, investors buying the stock at these levels better hope Sequenom can develop a blood-based fetal gene test for Downs Syndrome.

-- Reported by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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