Blog > Editor's Pic > Stem Cell Mania: Cord Blood is the flavor of the day!
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Stem Cell Mania: Cord Blood is the flavor of the day!

Today's Financial News - Posted January 27, 2009

Much like Geron (NASDAQ:GERN), Cord Blood America Inc. (OTC:CBAI) is benefiting from the belief in a new ear of medical miracles.

by J. Christoph Amberger

Baltimore—TFN: “We will restore science to its rightful place, and wield technology’s wonders to raise health care’s quality and lower its cost,” President Obama annouced last week in his inauguration speech.

That jibes with the public, media-supported perception that science somehow was suppressed in the United States during the past eight years.

The past week, however, indicates that scientific progress did indeed occur during the Bush Administration. Its results and rewards are coming online as we speak. Unless you assume that scientific development of a stem cell drug takes less than a week, our successful recommendation of Geron (NASDAQ:GERN) shows that private-sector science managed to cope quite well everything considering.

(You’ll recall, Geron is advancing an anti-cancer drug and a cancer vaccine that target the enzyme telomerase through multiple clinical trials.)

But people, including the investing public, prefer generalities to specifics. Hence, stem cell stocks are once again favorites of short-term punters.

The flavor of the day is a penny stock called Cord Blood America Inc. (OTC:CBAI). Depending on the fluctuations of a fraction of a penny, it’s been up 80-97% today. Its recent claim to fame is that it will “engage its clients, prospective clients, shareholders and prospective investors via social media. Cord Blood America is currently on Twitter, Facebook and soon to be available on FriendFeed.”

Wow.

Cord Blood America is the parent company of CorCell, which “facilitates umbilical cord blood stem cell preservation for expectant parents and their children”. In other word, they harvest stem cells from the umbilical cord of a newborn baby and store them in case there should ever be a need for them.

Overall, I think the business model is sound. It preys on affluent first parents’ urge to plan for the umpteenth contingency regarding their offspring. And combines it with the concept of a storage facility that charges you $100 a month to store junk that would be worth $50 if you sold it on eBay. Ideally on a credit card with auto-bill, for years and years and years.

Then again, this is a penny stock, and as such prone to incredible fluctuations. This article alone may propel it 50%… or about half a penny.

Given the reborn belief in technolological wonders, I think Cord Blood America may be successful stirring the publicity pot for a little while. If more people than the market maker will be making money off the stock is one thing… but for a hundred bucks, you might as well play.

For better opportunities, see Laura Cadden’s recent reports on stem cell stocks.


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