German Stock Party

Executive Summary

Germany has gone equity mad, and biotech stocks are among those enjoying boom times that have seen stock prices sky-rocket in recent months. Some industry observers caution that the party is getting out of hand and that such volatility is dangerous for an industry with long product development cycles. That's why recent moves by MWG-Biotech AG are attracting attention. The firms IPO price was 27 Euros; by mid-February the firm an investment bank helped the company carry out a capital increase, raising over $117 million. MWG's CFO quit suddenly within weeks of the IPO and before the company announced its 1999 numbers. All this may be explainable, but even the perception of impropriety might start a stock slide, according to one analyst.