Geron Slides on stock offering, Time to Buy? Print E-mail
By Vinny Cassano   
Friday, 10 December 2010 00:00

best penny stock playsEven as stem cell play ACTC continues to rise, shares of Geron Corp. - which many consider the leader in the stem cell field - continues to slide in significant fashion to close just under the five dollar mark, down over a dollar from their previous trading range.

The drop was the result of the announcement of a stock offering that priced shares of GERN at $5/per. It's expected that Geron will raise $87 million from the offering of 17.4 million shares, although the underwriters will retain the option of buying another 2.6 million shares for $5 each, possibly making this offering a $100 million event.

I've long favored ACTC as the better speculative buy than GERN and its near billion dollar market cap on a Phase II pipeline, but the current slide in price has me interested.

It is worth noting, however, the significant discount of the offering in relation to where the stock was trading and the growing cash burn rate which makes another round of dilution likely, although that will be further down the road if it does occur.

Over the long term, Geron has a very significant pipeline in the works that could make this a multi-billion dollar company as the that pipeline advances to market.

I'm still a little hesitant to buy, but this is as good an entry point as we've seen with GERN for some time.

May be worth looking at, given the drop in price.  Any more significant drop closer to four bucks would make Geron a no-brainer, in my opinion and barring any bad news, although keep in mind that there's a long way to go before market.

For what its worth, I still believe that ACTC has more remaining upside for the short term than does GERN as a stem cell pick.

Disclosure: No position.

Vinny also authors the popular stock investing blog VFC's Stock House.




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