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We now have more data on Dendreon’s (NASDAQ:DNDN) results for their prostate cancer therapy Provenge, and the numbers do, in fact, look good. This isn't a cure for refractory prostate cancer, but there seems to be a real statistical improvement in survival, with side effects no worse than the placebo group, and that should be enough for the FDA. In oncology you have to take what you can get.

What’s bizarre is the trading that went on in the company’s stock just before they started presenting on Tuesday. For reasons that are still unclear, a horrendous wave of selling hit within the space of a few minutes, and the stock went down as if hit with a club. Having risen to nearly $25 by about 1 PM, trading was halted in the stock at 1:27, with it now going for $11.81. As the company’s shareholders raved and cursed in utter consternation, the company was detailing exactly the results they’d been hoping to hear.

Wednesday, the stock shot straight back up to its former levels, but that doesn’t help the many people who (prudently, they thought) had put stop-loss orders in and had thus already been sold out. This Bloomberg story has a fellow who was cashed out at $9.31, which must make him wonder (1) just what the hell was going on, anyway, and (2) just what it means to halt trading in a stock, if you’re going to find yourself traded out of it at an even lower price.

I can’t help out with question (1) – I have to say, I’d like to know the answer to that one myself. But as for (2), that’s the problem with stop-loss orders, particularly in a stock that doesn’t have much of a float. Movements, especially downward ones, come suddenly and discontinuously, and the stock doesn't hit all the grace notes on the way down (as Fred Schwed used to say).

So good luck to Dendreon, and to the patients who will use Provenge. Dendreon's investors, on the other hand, have probably been through the power-wash and spin cycle so many times that they hardly know what's hit them.

Source: Dendreon Investors Learn a Hard Lesson in Stop-Loss Orders