At slow or unstable economic periods, money moves from high risk to low risk investment. That may lead to a market correction as those who had invested based on hype will stop to think or perhaps their pendulum swings to panic. This may in turn lead to overselling and what we see as market correction. The correction is always partial as some of that is over-reaction (look at every correction, you will see a bounce soon after, all within less than a period of economic recovery).
At or during a correction a large amount/portion of money still remains in the market, in fact a correction is typically upto 20% and even that does not mean 20% actually shift their money away from stocks. All it means is that money that is still in the stocks shifts from higher risk stocks to lower risk stocks.
Yes small biotech is high risk and more vulnerable to correction BUT this being the age of biotech chances are investors remain interested but simply more carefully chose which company to shift their money to or remain invested in. A number of factors will be taken into account. Some are intrinsic to the nature of the stock, e.g., product, potential, position in the market/sector and some are dependent on the investor demographic. As I highlighted yesterday, finance based investors (be it so called "sophisticated" or even institutional) are more likely to abandon the stock, specially managed funds. This is whey I has furious with that CR at 12c when the shares went to so called "sophisticated" (AKA, any joe blow and that would make broker money).
But there are finance based investors that are not predominantly driven by their clients with short or at best medium-term demands and investment strategies and some of those participated in the recent CR are of this nature and of course we have pharma interest as well which have long term view to investing in biotech. These provide the backbone and speaking of which, the company should be grateful for the long term retail holders who have stepped up to provide a safety net (as best as they can) when the SP dips.
The above considered, IMM has de-risked substantially; the product (LAG-3) has taken a leap, we have advanced our position in both trial phases and diversity of applications as well as cash position that has gone more to the backbone investors; institutional and some to long term retail - thanks to the SP falling to or below the CR which then fended off quick profit makers and left more shares for the long term holders.
So, all in all I do not think a correction (if or when) will affect IMM as bad at all and if one holds long term, it won't matter. And in fact I think IMM will likely be one of few stocks which may even have investment shifted to it at the time of correction (again if or when).
ALL MY OPINION. DO YOUR OWN RESEARCH. I AM NOT QUALIFIED IN FINANCE AND THIS IS NOT FINANCTIAL ADVICE.
IMM Price at posting:
50.5¢ Sentiment: Buy Disclosure: Held
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