Why is Moderna Stock up 66% This Week?

Tuesday, Nov 30 2021: Moderna Stock rose over 66% in the past week off of news that the MRNA team was developing an adapted vaccine to the new Omicron Variant of the Coronavirus. The stock market has been experiencing a lot of volatility over the past week due to a new, potentially more infectious variant of Coronavirus being identified by doctors in South Africa.

If Omicron turns out to be very bad, it can lead to lockdowns and hurt economic growth like the original SARS COV-2 virus that crushed the global economy back in March 2020. This would make a booster from the vaccine maker team at MRNA very popular, which is fueling the buy-fest driving up $MRNA market cap.

The headlines are wild and sometimes overblown. So in the main content of this post, we'll try to unpack all the threads pushing Moderna stock to new heights.

Moderna has had a brilliant run with RNA Technology

Before this -- Moderna's stock had been on a wild ride after their mRNA technology proved critical for the development of vaccines to combat COVID 19. Rather than just being a biotech company that creates transformative medicines based in mRNA to fight the pandemic -- Moderna inc ($MRNA) is leveraging that new market cap to develop mRNA (messenger ribonucleic acid) treatments for many other diseases. The company is engaged in a clinical trial to test an application for their technology that can prevent HIV infection, as well as a development that can produce a cancer vaccines for certain kinds of cancer.

This technology has provided a huge boon to biotech. Moderna is hoping to provide services to a wide range of new medicine partners in the coming years. For the most part, Moderna has only had customers in the form of actual governments.

Moderna's stock price had been wavering in the last month due to dismal earnings caused by coronavirus vaccine saturation in many parts of the world. While there is still plenty of revenue now that most nations are recommending getting a booster shot to maintain immunity.

This will be a long term driver for company revenue, giving their product pipeline time to develop.

Messenger RNA is how living things turn DNA into protein. The COVID vaccine uses a messenger RNA code to help a patient's cells construct the spike protein from the SARS COV-2 virus. By making that protein, our bodies can make antibodies that attack that protein and thereby gain immunity to the virus.

Investors pushing the stock price up are signaling confidence that Moderna inc can benefit tremendously from this situation and provide services that help eliminate the pandemic in any form. Our analysis suggests that MRNA is the best play in this technology at this time.

The Stock Market Reacted with a lot of volatility to the Omicron Variant

The Dow Jones Industrial Average fell 900 points on Friday after data suggested that a new variant of the coronavirus--dubbed Omicron by the WHO--may be more transmissible than other variants and might lead to new lockdowns.

This drop was one of the worst since the complete collapse our economy experienced when the world first went into lockdown in March 2020. The fear here comes from two distinct areas:

1. Omicron can potentially transmit faster and farther than most variants we've seen in COVID
2. The Omicron variant is mutated enough from the original COVID 19 virus that current vaccines will be rendered ineffective.

Market data suggests that a new lockdown might trigger a correction that will be difficult to dig out of. Travel companies were hit the hardest. Stocks like Carnival, United Airlines and others fell hard on these fear. Markets are still not sure what this new covid information means.

This transmissibility is a troubling sign. 

More news has come out recently that suggests this new corona variant may not be as severe as others -- which is driving a positive upswing at the beginning of the week.

The Data on this New Variant is still too new

Companies are clearly reacting strongly to this new variant-- with so many stocks dropping -- but it needs to be said that there simply isn't enough data right now to suggest how bad or how infectious this variant is. We won't really know bad this is for a few more weeks. Until then, the Dow Jones Industrial average is stabilizing nicely well above it's initial 900 point drop.

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