The other week, while hiking through the Marin Headlands with my old climbing partner from my Everest days, I got a call that reminded me why contrarian investing can be so profitable.
My friend Janet, who runs a small biotech fund in Boston, was practically hyperventilating about Moderna (MRNA). Not because she was excited, mind you, but because she’d just watched her position get absolutely decimated.
“This thing is radioactive,” she said. “Nobody wants to touch anything vaccine-related.”
I had to laugh as I marveled at a red-tailed hawk circling overhead. Here’s a company that just proved mRNA technology works by generating over $60 billion in COVID vaccine revenue, and now it’s trading like a penny stock because people are tired of shots.
Sometimes the market’s stupidity is breathtaking.
Let me give you the numbers that matter. Moderna crashed 95% from its peak, meaning 100 shares that cost $50,000 at the top now go for $2,500.
The company sits on $6 billion in cash against just $745 million in debt. They’ve got 45 programs in development with seven in Phase 3 trials. Yet the stock trades like they’re going bankrupt tomorrow.
This is classic market overreaction, and I’m treating it as a generational buying opportunity.
The short sellers are having a field day with over 60 million shares short, representing nearly six days of trading volume. When sentiment eventually shifts, and it will, these shorts are going to get their faces ripped off. I’ve seen this movie before in biotech.
Here’s what everyone’s missing while they panic about RFK Jr. and vaccine skepticism.
Moderna isn’t just a vaccine company anymore. Their mRNA platform is like having a universal programming language for human cells.
Tell the cell what protein to make, and it makes it. Cancer treatment, heart disease, genetic disorders – the applications are enormous.
Their melanoma vaccine with Merck (MRK) is in Phase 3 trials showing solid results. They’re working on renal cell carcinoma and bladder cancer treatments.
The beauty of mRNA is once you crack the code for one disease, adapting it for others becomes much faster and cheaper than traditional drug development.
The financial projections tell the real story. Yes, they’ll lose money through 2027 – $10.04 per share in 2025, $7.37 in 2026, $4.44 in 2027.
But look at the trend: losses shrinking by 26.58% and 39.75% while revenues grow 17.31% and 26.16%. Sales hit $3.07 billion by 2027, up from $2.08 billion in 2025.
That’s not a dying company. That’s a business transitioning from pandemic windfall to sustainable commercial operation while building the next generation of medicines.
The AI angle is huge, but nobody’s talking about it.
Artificial intelligence is already accelerating drug discovery, and mRNA technology is perfectly suited for AI-driven development. Machine learning can rapidly design and test new sequences, giving Moderna a massive advantage.
Bill Gates recently put the odds of another pandemic at 10-15% in the next four years, with a severe one “likely” in 25 years. I don’t like those odds, but they explain why I view Moderna as portfolio insurance.
Some investors buy gold to hedge against financial catastrophe. I’m buying Moderna to hedge against biological catastrophe, with massive upside if their pipeline delivers.
The insider buying has been notable, too – three executives dropped $1-3 million of their own money on shares recently. When management puts skin in the game at these prices, it tells you something.
My strategy is straightforward: small speculative position with huge upside potential.
At $25 per share, I’m essentially buying a long-term option on mRNA technology and pandemic preparedness with no expiration date. The high volatility also makes this perfect for covered call strategies to generate income.
The bears aren’t wrong about near-term headwinds.
Vaccine fatigue is real, regulatory environment is challenging, and they face years of losses while building commercial operations.
But these temporary issues are creating exactly the kind of opportunity contrarian investors dream about.
I’ve been doing this for 40 years, from Tokyo in the 1970s to running hedge funds through multiple market crashes. The best returns come from proven technology platforms trading at distressed valuations due to temporary sentiment problems. Moderna checks every box.
Look, when a company with $6 billion in cash and technology that could cure cancer trades for less than a decent bottle of wine, you don’t need to be a rocket scientist to spot the opportunity. I suggest you buy the dip.