StemCells Inc. feeling the Post-Election Blues

On election day StemCells, Inc. (NASDAQ:STEM) shares were in the $2 range, after moving up to $2.28 the following week its been a straight drop to under $1 a share.  Since Nov 11th, STEM shares have lost 60% of their value.

The day before Barack Obama swept the nation with his landslide victory I wrote an article titled Trading on Obama Hopes: Alternative Energy and Stem Cells

Take a quick trip back to that week, here's how those stocks were performing:

Investors are trading the Solar and Stem Cells stocks like crazy in hopes that Barack Obama and the Democratic Party win big in the upcoming election.  The only issue for these stocks is, how long can the rally last before the profit takers cash in all the gains?

The momentum in Solar and Stem cell stocks has been unstoppable this past week:

• Evergreen Solar (NASDAQ:ESLR) up 18% today and up 73% in the last 5 days. 
• First Solar Inc (NASDAQ:FSLR) is up 12% today and up 29% in the last 5 days.
• StemCells Inc (Nasdaq: STEM) up 43% today and up 100% in the last 5 days.
• Geron Corporation (Nasdaq: GERN) up 12% today and up 59% in the last 5 days.

Nothing big has happened with these stocks lately, nothing to warrant a 100% move in 5 days, its all coming from the hopes that Obama and the Democrats run Washington in the coming year and these 'alternative' companies will benefit greatly.

However with the way traders cash in and cash out of stocks these days, could the Obama Factor already be priced in these stocks?

You bet it was, the Obama factor traded these stocks up fast and since that time the market has tanked and investors have since bailed, StemCells Inc shares closed at 90 cents last Friday.

StemCells shares also took at hit in the last few weeks after the company announced they planned to sell 13.8 million shares for about $20 million, or $1.45 a piece. Investors will also receive warrants to buy about 10.3 million shares of stock at an exercise price of $2.30 apiece.

After paying fees and expenses, the company expects proceeds of about $18.5 million, which will be used to fund general corporate purposes and other items. 

However, now there is new hope...more Obama hope.

Except to see more articles like these popping up in the coming weeks:

Obama may fund stem cell research
Sunday, November 23, 2008
By Jessica Coomes

WASHINGTON - In one of his first moves in the White House, President-elect Barack Obama could free up federal money for studying stem cells taken from human embryos.

Stem cell, children's health care issues top legislation list
Democrats readying bills for Obama to sign soon after he takes office.

By David Espo
ASSOCIATED PRESS
Sunday, November 23, 2008

WASHINGTON — Democratic congressional leaders intend to begin work in early January on priority legislation so it can be ready for President-elect Barack Obama's signature shortly after he takes office in January, officials familiar with the plans said. 

Don't expect STEM shares to stay at 90 cents for long, the train that took shares up and down again, could be ready to start up all over again.

Discliamer: No positions in any of the securities mentioned in this publication.