The initial reaction from Wall Street analysts following Gilead Sciences, Inc. GILD 0.09%’s nearly $12 billion buyout of Kite Pharma Inc KITE 0.3% was mostly bullish, although price targets and ratings on Gilead are a mixed bag on Wall Street. However, this week’s trading action suggests the market has made up its mind about the deal and has given its seal of approval.
Following the announcement of the deal, Gilead shares initially demonstrated a muted reaction Monday, rising just 1.2 percent on the day. The stock picked up steam in the days that followed as investors dug into the details of the deal and began to understand its potential long-term growth implications.
Thursday morning’s 2-percent gain puts Gilead shares up more than 12 percent this week. The Kite acquisition may be just what the company needs to ease investor fears about growth avenues in the years ahead.
Ironically, Gilead’s largest success in recent years has been the biggest thorn in its side as well. Gilead essentially cured Hepatitis C with its revolutionary treatments. However, with Gilead’s treatments so effective that they are wiping out the disease, the company is losing customers by the day.
“Perhaps the awful, brutally honest lesson here is: curing disease is great for patients but sucks for business,” journalist Adam Feuerstein tweeted after Gilead guided or up to a 50-percent decline in hepatitis C drug sales in 2017.
Prior to the Kite deal, Gilead shares had drifted…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
