Why I'm Closing MasterCard and Sequenom

I am not liking the action the past few weeks in MasterCard (MA); until the stock gets back over $174 (the 200 day moving average), this looks more like a short to me than a long. I've slowly bled out the position and only have a 0.3% stake left, so I am going to close it for now and head for the exits. I've owned this name on and off for going on 2 years, so I am sure I will be back, but the stock is not saying good things to me right now. Visa (V) despite a much higher valuation, seems to be the current favorite by the institutional money based on the debit vs credit exposure compared to MA. [May 2, 2009: WSJ - Debit Card Use Overtakes Credit] [Apr 30, 2009: Visa (V) Beats the Street]


I've been debating shorting Mastercard here for about 10 days, but it really doesn't fall much either - it just sorts of sits in a defined range. Plus shorting is now clearly unAmerican. (per government decree)

I am trying to stick to 40ish positions in the portfolio, and this looked like a good candidate to clear out as I look to cull. Sequenom (SQNM) appears to be a lost cause for now - until more data comes out late in the year, it might just be stuck in a range here between $2-$5. I was hoping for some quick rebound to maybe $5, but with a 0.3% stake, it really is a moot point. I am not ready to commit one more dime to this name until there is a lot more clarity. Lazard upgraded it ,so it's as good of a time as any to sell...

• Shares of Sequenom Inc. jumped Wednesday after a Lazard Capital Markets analyst took a neutral stance on the company's prospects, still cautioning that issues with a Down syndrome test could hurt the diagnostic test maker.

• In April, the stock crashed after the company said it will delay launching its SEQureDx Down syndrome test because of "employee mishandling" that the company said appeared to affect all studies of the test.
• Lazard analyst Dr. Sean Lavin upgraded the stock Wednesday to "Hold" from "Sell" and said the rewards for investors are likely greater than the risks with the stock trading so low. Future study results for the test could boost the stock if they are positive, he added. Those results are expected toward the end of the year or possibly in 2010.
• Lavin meanwhile said a move by competitor Qiagen to launch its DNA extraction technology could be a good sign for Sequenom, adding credibility to the company's market. We believe Qiagen's interest helps validate the robustness of the potential market for diagnostic assays," Lavin said, citing the focus on the two key markets of prenatal and cancer tests.
• The stock will likely remain flat for some time, he added, with future independent study data bringing the possibility of boosting the stock value past $20 per share if successful. Negative results, though, could send the stock below $2, he said.

The key here is independent... internal controls as Sequenom (SQNM) have been deemed FAIL WHALE. I expect the stock to move ahead of the news available to the public when results start piling in internally - since the market (leaks) "knows all". Will revisit post Halloween.

Disclosure: No positions

Comments

[Candeloro:]

So to understand you,
you bought SQNM because you thought it would go to 5$.
You held it all the time and think it is kept in an area between 2$ and 5$.
We are moving up and you think it could run to 5$, which was the goal to reach as you bought it.
Why sell then? Wanted to reach 5$ , you tell that it could reach that goal and that is why you sell?
You would look really stupid if it pops to 5$ today, right?

But its your choice..of course! But sounds like a strange strategy.
Regards

May 28 03:38 AM

[silentcinder:]

Anything that moves sideways for an extended period of time is great candidate to write calls on. With the downside already in, you can easily make 5% a month on this.

May 28 01:10 PM

[scott weins...:]

don't write this one off

May 29 07:59 PM

[scott weins...:]

sqnm

this one is a keeper

May 29 08:00 PM

[buyforeclos...:]

wow sqnm way over 5...some MM scum triggered a short squeeze is all but that is todays market all manipulation and NO SEC to be found

SEC is pathetic joke

Jun 09 04:09 PM

[Stock Huntsman:]

Well, this made, and surpassed, the $5.00 mark today. Volume, usually about 5 million per day, was over 52 million! Now there is no news out, so what drove this up over 50% on this massive trading day? Could it be some rumor or leaked inside information? Who knows, but sure looks like somebody knows something.

Jun 09 04:28 PM

[vicelord:]

I was wondering the same thing, Stock Hunstsman. I bought in the other day @ 3.73 when the ruumor 1st got floated around. I would've sold it in pre when it went to 5.82, but like an idiot I bought using a cash account and I had to hold it for 3 days or I'd get a free ride restriction. So I watched it plummet all day the next day and was sick to my stomach for missing out on the profits and for buying in on what I KNEW was manipulation, and I felt like an idiot. Still do.

Well, tomorrow I can sell it if I want. But now I don't know if I want to. I keep watching the options volume and even the Sept. 7.50 calls are getting action. I can't even imagine the short interest on it now, after that fiasco. It must be stratospheric. So if it shot up like that on a rumor, can you imagine if there was real news?

The last line of the above article keeps haunting me, 'cause it's true....

I expect the stock to move ahead of the news available to the public when results start piling in internally - since the market (leaks) "knows all".

Jun 11 07:12 PM