Novavax: Nearly A Double The Hard Way

Novavax, Inc. NVAX shares are trading higher by $0.20  10 percent) at $2.14 in Thursday's session. At $2.32, that would be a double from last Friday's low of $1.16.

The only relevant news out on the issue is that director Gail Boudreax bought 100,000 shares of the issue. The shares were purchased at an average price of $1.45 and now the director owns 200,000 shares of the company's stock.

The purchase certainly is a vote of confidence in the clinical-stage vaccine company and comes to a welcome surprise to all the bottom-fishers in the issue the four prior sessions. There certainly was quite a few of them as the issue traded 242 million shares compared to its 100-day average of 10 million.

Most likely, those bottom-fishers were not in the issue before last Friday's plunge from $8.34 to $1.29. The catalyst for that decline was a Phase 3 trial missed its endpoint for respiratory syncytial virus. Instead, they may have been speculate investors banking on either a short-covering rally of some bit of good news to bolster the share price. For those investors, if totally wrong on their purchase, the downside was relegated to amount they paid for the issue.

On the other hand, any investor brave enough to short the issue in the $1 handle faced unlimited risk to the upside and a limited reward from the price sold to $0.

So far, the director's purchase along with the hope the company can develop a successful vaccine for respiratory syncytial virus are providing a boost to the issue. Although the rally is providing for short-term profits for those speculating over the last few sessions, it will be quite some time, if ever, that the vast majority of shareholders in the issue will see the light of day.