Moderna's CEO Just Gave Investors a Huge Reason to Sell the Stock
CEOs are known for giving rosy outlooks for the future. And when that doesn't happen, it should raise some serious red flags. Recently, Moderna (NASDAQ: MRNA)'s CEO highlighted a big risk for the company: Demand for its COVID-19 vaccine is going to crater. It's a big enough decline to get investors worried.
Moderna is anticipating a big drop in demand this year as concerns around COVID-19 subside. It's a big reason why the healthcare stock trades at a lowly eight times earnings -- investors know that earnings will take a hit this year. One way Moderna plans to offset some of the decline in demand is by raising the price of its vaccine to $130 per dose. Previously, the company was selling its doses for less than $30 to the U.S. government.
The purchases will now come from the private sector, and so volumes will be lower. But just how much lower is what might surprise investors. "We're expecting a 90% reduction in demand" is what CEO Stéphane Bancel told U.S. senators at a hearing this month to defend the company's price hike.
Source Fool.com
