Volume Spike Investor

Insmed Inc. (Nasdaq: INSM) is getting killed on about 10-times trading volume after only about 50 minutes of trading since the market opened.  You can see the full news analysis, plus the question over the CEO stepping down, over at BioHeathInvestor.com, but we wanted to run a more detailed analysis of what happens when Insmed see double or more of its average daily volume trading hands.  So far we saw more than 10-times normal volume, and that is the largest in a year.  You will need to scroll through these to the end to see the net result, but the jump up in trading volume of the past that got us here before today might garner a belief that a 50% drop is not enough if you take this to an extreme…..

24-Jun-09 1,639,200  $2.33
23-Jun-09 2,679,800  $2.30
22-Jun-09 4,210,800  $2.09
19-Jun-09 3,846,400  $2.47
18-Jun-09 5,396,500  $2.42
17-Jun-09 1,864,000  $2.16
16-Jun-09 1,935,700  $2.13

10-Jun-09 2,388,300  $2.15
9-Jun-09 3,047,000  $2.16
8-Jun-09 3,511,700  $2.03
5-Jun-09 2,174,900  $1.87
4-Jun-09 1,023,600  $1.72

19-May-09 3,044,400  $1.64
18-May-09 3,916,300  $1.56
15-May-09 364,500  $1.36

21-Apr-09 2,353,000  $1.37
20-Apr-09 1,603,500  $1.36

10-Mar-09 2,579,600  $1.00
9-Mar-09 348,300  $0.90

12-Feb-09 4,879,100  $0.68
11-Feb-09 84,800  $0.44

10-Nov-08 2,324,000  $0.59
7-Nov-08 787,400  $0.48

25-Jul-08 3,751,200  $0.77
24-Jul-08 412,300  $0.63

As you have seen, most of the prior big volume spikes took this one higher.  Less than a year ago the stock was under $0.70.  Even with a 50% pullback shares are still at $1.09.  Based upon the developments in the company and the large capital raise, we won’t doom this one ahead of time by saying it has to go back down to the lows.  However, another serious misstep from the company will allow it to find out how painful it is being a biotech company that fails in its goals.

The floor here at the $1.25 mark down over 50% that has been seen is largely because the company raised $130 million as you will have seen above in the BioHealth news analysis.  Its new market cap after today’s drop puts it right in line with that $130 million.

Jon C. Ogg
June 25, 2009