Side Effects are Common and Legendary

Your hair cream may cause impotence. I bought thirty-five shares of stock of this company SFBC International (SFCC) on 10 Nov. I noticed some direct insider buying at market price by Lisa Krinsky, the Chairman and COO. I liked the business model. They perform clinical testing for companies seeking potential new drugs. For each drug approved by the FDA, there are thousands of compounds that have to go through a series of costly clinical trials. The company has taken on some debt recently, but their revenue and profits are rising. Two days after confirming my E*Trade purchase, I was on a plane to Maui with my beloved. I felt that the stock might go up, but was unlikely to go down.

A few days before I bought my shares, there was a Bloomberg article critical of the industry in general and SFBC in particular. The Bloomberg link is here: http://www.bloomberg.com/apps/news?pid=specialreport&sid=aspHJ_sFen1s&refer=news. This story knocked the share price down, which is where Krinsky stepped in to defend the stock. Enough people followed suit to boost the price a few points. My beloved and I were at finis terre, land's end, in wet Hana, Maui, camping at Waianapanapa state park. We stayed in a green cabin surrounded by lush vegetation and raw lava rock that crunched under our tires. We had no TV, just a little radio that picked up one station broadcasting from the Big Island.

Once we got settled in our Kihei B & B the next week, we were able to visit an internet cafe. I was stunned to see that SFBC had shed about twenty percent. Bloomberg came out with a follow-up article focusing on SFBC. The sources for the first article allege that upon returning to the clinic, they were threatened with deportation by company CEO Arnold Hantman. On the 18th, the company hosts a conference call to deny the allegations and announce an independent review. This is about all the company does to defend the stock for weeks. Each day the stock slides a little more. I listened to the CC the last day it was available, Nov. 30. Hantman had a canned speech denying even meeting the individuals named as sources for the Bloomberg article. SFBC maintains that the study participants were terminated for violating the company's confidentiality agreement. There was a question and answer segment in the CC, and the second analyst, an asian female, asked about the company's new bookings and its projected book/bill ratio. Their comments about that seemed lukewarm and unprepared. I decided to watch the stock and sell it if it showed any weakness.

Early that morning, SFCC rose a few tenths. I played Call of Duty for awhile. Shortly after noon eastern time it was weakening. Then I saw a large sell order on the Level II quotes which seemed to be an institution getting out. Less than a minute later I was out also, at $21.58. A thirty two percent loss in twenty days. That isn't even my worst stock trade ever. Yet I am incredibly grateful.

Because the next day, Bloomberg published yet another article about SFBC, citing safety issues regarding fire exits at the company's Miami office. Hmm, one might wonder about the agenda of those Bloomberg folks.......... I watched the stock capitulate from the sidelines. All the way to the low 15's. I wish I could say that's where I got back in. I wasn't sure the slide was over. Too bad I can't trade after-hours. No, I got back in later the next morning, at $17.90. If they just defend the company, it should go into the mid twenties again. Whatever.