The Dean’s Trades: Shorting Swine Flu Stock NVAX at $2.80

April 30th, 2009 at 9:28 am Posted by The Dean
Dear Students

NVAX has way too much resistance at $2.80 and I’m short selling this poster child of all swine flu stocks. You see just like I said the other day there are plenty of ways to trade these swine flu plays.

Especially after the 8K released yesterday afternoon, I’m confident this swine flu stock has a very limited upside. Yesterday’s 8K disclosed a financing package whereby 2.04 million newly issued shares were granted to existing debt holders in order to extinguish 4.75% senior convertable notes. If management willingly sold shares at $2.50 to extinguish low-yielding debt than I like my odds short selling this swine flu stock at $2.80.

NVAX has been trading sideways all week and hasn’t yet proven its ability to trade anywhere near Monday’s High of  $3.88  (along with the entire list of swine flu stocks).  I anticipate that existing shareholders will become frustrated with the lack of movement and sell on the belief that the hype virus is contained.

shorting-swine-flu-stocks-nvax

Happy Trading, The Dean



4 Students Raised Their Hands

  1. Dean NVAX is at $2.46 do you plan to cover and take profits before closing bell?

    2. Jane Bremer on April 30th, 2009 at 12:15 PM

  2. Jane-

    I still maintain a short position over night and i’m confident that NVAX will trend lower as the hype subsides.

    3. The Dean on April 30th, 2009 at 3:09 PM

  3. I made the same trade but I wound up shorting a little higher at $2.90 — still very confident!

    4. JohnCollum151 on April 30th, 2009 at 5:10 PM

  4. Great post on swine flu!

    5. Swine Influenza on May 15th, 2009 at 9:10 PM

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