BPAX is trading for less than cash (cash less long-term liabilities) plus residual pipeline value (even after the libigel disappointments)
Historically, stocks that have seen large drops in share price also can spike further in early January known as "January Poppers" effect.
BPAX has a PDUFA forward looking near term catalyst date on February 14 2011.
I have played many biotech 'failure' stocks for a hefty rebound successfully. Sometimes they bounce immediately, like OREX, last year when contrave was rejected by the FDA.
OREX went from about $2.40 to $4.10 in a few days.
Losing institutions have had to sell in order to push through and claim tax losses before end of year.
Similarly, institutions and big money who have won massively from being short - and their are 21 million of them! will want to push through their tax gains before end of year.
But To recognize their huge gains from BPAX shorts, they must COVER which will add upward pressure to the stock.
When a stock cliffdives such as BPAX, margin selling normally occurs for the first three days. This adds down pressure to the stock, of course. http://finance.yahoo.com/q/hp?s=BPAX+His
Expect volume to drop dramatically over the next couple of days as most of the big exits have already taken place.
How will the remaining millions of shorts (some covering has occurred) be able to cover without the needed volume without bidding up the share price?
Friday's drop was a last ditch attempt by shorts that are desparate to cover, to take out stop losses (yes, they know where stops are placed) and induce FUD (fear, uncertainty, doubt) in order to cover as profitably as possible.
Other times, these biotechs that have bombed, rebound a few days to a week or so later.
Unfortunately, only market makers know when that period will likely occur from their institutional order flows that are placed with them on the buy and sell sides.
These are just some of my humble opinions. Please do your own research.
Feel free to agree or disagree with the above, if you have reasons why you think buying in BPAX between .45 - .50 is or isn't a good trading opportunity for a bounce play.