Financial Chatter – Hillary Clinton’s Strongly Worded Tweet Incites Action From “Most Hated Man”

The power of a strongly worded tweet from Hillary Clinton was realized last week when one tweet proved to be enough to stimulate financial chatter and influence stock sentiment. The dramatic story began when a drug called Daraprim, owned by Turing Pharmaceuticals, increased the per pill drug price from $13.50 each to $750 each overnight. Turing Pharmaceuticals, a privately held startup, publicly justified the increase as an attempt for the company to simply stay in business. Even after assuring the public that along side the price increase, new savings programs and charitable funds will be rolled out to ensure that the drug remains readily available, Martin Shkreli has been deemed “the most hated man in America,” at least for this week.
The Effects on Biotech

Presidential hopeful, Hillary Clinton, effectively unnerved biotech investors, as demonstrated by the 5% drop reflected by the iShares Nasdaq Biotechnology ETF. The NASDAQ was plunged into the red by biotech stocks following the tweet and the loss was led by BioMarin Pharmaceuticals and Biogen.

Shkreli’s latest pricing scheme, causing the recent upheaval, is not the first time that he has demonstrated strategies that have earned him criticism. One of the stocks most effected by the Daraprim price increase is Retrophin, a company founded by Shkreli. In 2014, he was fired by the company and is currently engaged in a legal battle with them, which was initiated by Retrophin. Apparently, many investors are responding to financial chatter that Shkreli is, once again, employing similar strategies.

Many biotech speculators feel that the industry was ready for a break in upward momentum. The NASDAQ biotech ETF has soared 600% since the March 2009 bull market in US stocks began. The upcoming elections and the impending political pressure that will be applied to the industry will undoubtedly effect stock sentiment. Critics of the drastic drop in biotech suggest that Wall Street overreacted by responding to Clinton’s tweet when she has not yet earned the Democratic nomination. Realistically speaking, the changes suggested by her proposal would first need to be approved by Congress.
The Political Factor

Investors are now left to speculate on whether the downturn in the biotech industry is providing a prime opportunity to buy low. The election cycle is predicted to be volatile which is expected to provide short term investors with trading options and long terms investors with substantial buying opportunities. Presidential hopefuls will undoubtedly throw additional curve balls into the mix by unveiling plans to curtail Big Pharma. Just this week, Clinton suggested that she plans to reduce government grant money and empower government to limit drug costs. Bernie Sanders has also proposed implementing government limitations on drug pricing and has suggested that the doors to Canada be opened for the purposes of importing prescription drugs, since Canada offers the same drugs for a fraction of the price.
Negotiating the Biotech Unrest

Conflicting financial chatter relating to the latest developments have undoubtedly created uncertainty for the biotech market. The rapidly growing fintech market allows biotech investors to monitor stock sentiment in order to secure wise short and long term investments. The fintech analytical tools offered by SentiQuant harness the power of financial chatter and convert it into actionable insight. As the upcoming election influences financial markets, those investors that will have the most foresight will be those who take advantage of tools that extract stock sentiment and deliver it to the investor.

Sign up for SentiQuant’s financial data analytics tool today.

Happy Trading,

Patrick