A Vaccine With a Poison Pill

One company that may have a promising lead on a Covid-19 vaccine is Moderna Inc., a U.S. biotechnology firm that we talked about on Tuesday. A Covid-19 vaccine would be a very good thing, and the market has been following Moderna’s work with great interest. Its stock is up about 240% this year. It was up 20% in one day, this Monday, after Moderna announced good results in a Phase 1 trial, and Moderna took advantage of investor enthusiasm to sell $1.3 billion of stock that day to fund production of the vaccine.

This is all how it is supposed to work. A company does a good thing with a promise of large future profits, the stock goes up, the investors get rich, and the company raises more money to continue and expand the thing by selling stock to the enthusiastic investors. In Moderna’s particular case, the stock fell a lot the next day as questions were raised about those Phase 1 results, so there is some drama and uncertainty here, but, like, the shape of it is correct.