Jim Cramer Said This of Moderna’s IPO Tumble

Shares of biotech company Moderna, which focuses on drug discovery and drug development based on messenger RNA, dropped nearly 20% on its opening debut in the market.

Despite the drop, the company raised $604.3 million for an initial public offering, making it the biggest in biotech history.

According to CNBC’s Jim Cramer, “There’s more to Wall Street newcomer Moderna than the action in the biotechnology company’s stock.”
H
e has said that investors shouldn’t draw conclusions about biotechnology company Moderna solely on the stock’s worrisome action after its initial public offering.

The “Mad Money” host has said that the company has some “major” positive drivers. Cramer has said, “It’s recession-proof at a time when many investors are now worried about a slowdown. It’s got an exciting concept; you can argue that messenger-RNA-based medicine could revolutionize health care. And the stock has pulled back dramatically in the short time since it’s been public.”

“The industry clearly believes the technology is worth betting on,” he said. “These companies understand the potential of messenger-RNA-based medicine.”

“Early-stage biotechs like this one don’t trade on the numbers, they trade on belief,” Cramer explained. “In about a month, Moderna’s quiet period ends, and the analysts will start rolling out their coverage. If they tell a bullish story, and I think they probably will, this stock can rally.”

“These speculative biotechs are a lot like [the Yankees’] Giancarlo Stanton — when he steps up to the plate, he’s likely to either strike out or hit a home run,” he also said. “If you’re trying to save for retirement, Moderna is not the stock for you. However, if you want to take a chance with your speculative ‘Mad Money’ portfolio, you have got my blessing to buy this one. I know it can probably still go lower, but you’re getting a pretty darn good entry point.”

Moderna creates synthetic mRNA that can be injected into patients to help them create their own therapies.

Disclaimer: We have no position in Moderna Inc. (NASDAQ: MRNA) and have not been compensated for this article.