A photo from last year's JPM of a breakout room gone wrong

Wednesday, 7-January-2015

Adam Feuerstein at TheStreet.com did an excellent job yesterday describing in this article how only a small percentage of companies are currently scheduled to webcast their breakout room Q&A presentation at next week’s J.P. Morgan Healthcare Conference.  This is an important issue for those of us who are not able to attend. 

 

While fairness implies that investors on the outside deserve to hear even the most mundane information said in these rooms, I thought I would share a photo from last year’s conference that drives home what happens when things really go wrong. 

 

NewLink Genetics (Nasdaq: NLNK) gave their main presentation at the 2014 J.P. Morgan Healthcare Conference on January 15th at 10:00 Pacific, which corresponds to 1:00 Eastern on the below chart.  This main presentation was webcast.  As you can see, NewLink stock did not move an inch during those 30 minutes. 

 

What comes next is the breakout room at 1:30, which was not webcast.  Look at how the stock takes off like a rocket shortly thereafter.  

As you can imagine, it is indescribably frustrating to be sitting at home and seeing a stock move like this in the dark.  It is not how the stock market is supposed to work.  Honestly, we do not even know if NewLink executives said anything in the room to set off the move, but that is the whole point.  Without knowing what is being said, you have to assume the worst, which is that some investors are benefiting at the expense of others.

 

Keep in mind that the importance of this breakout room issue goes beyond just this one conference.  It speaks to the heart of what gives Wall Street a black eye and keeps many regular people out of the market these days.  After things like the book Flash Boys and recent insider trading scandals, people have been asking a lot lately whether the stock market is fair.  When you see a chart like this, there is only one conclusion you can come to. 

 

All investors deserve to be treated fairly, and so increasing transparency by webcasting the breakout rooms is the right thing to do.

Who Am I?

I'm an individual investor from Kansas City.  My focus is on biotech stocks, but I enjoy investing in all industries. I'm an old-school, buy and hold investor who believes the best way to outperform and grow capital is to own innovative companies with good management teams over the long-term. more>>

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