Stock in an Australian biotech company that was questionably promoted to members of the House by Rep. Chris Collins (R-N.Y.) plummeted from $1.77 a share to just 5 cents on Tuesday, after the company announced its multiple sclerosis drug had failed trials, The Buffalo News reports. "The news is dire for both the company and investors," Australia's Money Morning wrote, as shareholders' hopes had hinged on the promising drug's success.
Collins is the firm's biggest shareholder; he owns about a fifth of the company, Innate Immunotherapeutics, with his two children. He personally lost $17 million Tuesday, Bloomberg reports.
"Sophisticated investors know there's a risk and as you now know, there was never any inside information that would indicate otherwise," Collins told The Buffalo News, defending his decision to promote the company's stock to his colleagues.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
The Buffalo News added:
...Unusual trading activity Friday "suggests that somebody with knowledge of the results was front-running the announcement," [analyst Sean] O'Neill said. "That’s something I'd hope the regulator will be looking closer at."Collins told The Buffalo News Tuesday morning that he did not sell any of his shares in Innate before its price collapsed. [The Buffalo News]
Health and Human Services Secretary Tom Price, a former congressman from Georgia, invested in Innate Immunotherapeutics at Collins' suggestion, a topic that was raised and criticized during his confirmation hearing earlier this year. Collins had reportedly bragged "off the House floor … about how he had made people millionaires from a stock tip." Price sold his shares in February for $250,000.
-
A rat infestation is spelling trouble for the almond industryThe Explainer The infestation has affected at least 100,000 acres in California
-
The 5 best singers turned actors of all timethe week recommends It's not often that someone is born with both of these rare skill sets
-
'This is exactly what technology should be doing'Instant Opinion Opinion, comment and editorials of the day
-
Trump said to seek government stake in IntelSpeed Read The president and Intel CEO Lip-Bu Tan reportedly discussed the proposal at a recent meeting
-
US to take 15% cut of AI chip sales to ChinaSpeed Read Nvidia and AMD will pay the Trump administration 15% of their revenue from selling artificial intelligence chips to China
-
NFL gets ESPN stake in deal with DisneySpeed Read The deal gives the NFL a 10% stake in Disney's ESPN sports empire and gives ESPN ownership of NFL Network
-
Samsung to make Tesla chips in $16.5B dealSpeed Read Tesla has signed a deal to get its next-generation chips from Samsung
-
FCC greenlights $8B Paramount-Skydance mergerSpeed Read The Federal Communications Commission will allow Paramount to merge with the Hollywood studio Skydance
-
Tesla reports plummeting profitsSpeed Read The company may soon face more problems with the expiration of federal electric vehicle tax credits
-
Dollar faces historic slump as stocks hit new highSpeed Read While stocks have recovered post-Trump tariffs, the dollar has weakened more than 10% this year
-
Economists fear US inflation data less reliablespeed read The Labor Department is collecting less data for its consumer price index due to staffing shortages
