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Mystery Stock Update

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by Felix Salmon
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Nov 08 2007 12:00am EDT

Mystery Stock Update

On Monday I wondered what stock could possibly have been worthless at the end of 2005, but worth $14 million at the end of 2006. A very loyal reader (really: the name on the comment is "averyloyalreader") pointed out that the Boston Globe version of the story talked about "the private company whose stock they sold," which might or might not imply that the company was closely held and not publicly-traded.

If it was public stock which got sold, however, Eddy Elfenbein has a "completely wild guess": Cambridge Heart. It's in the right geographical neck of the woods, and its stock skyrocketed at the beginning of 2006. At the beginning of December 2005 it was trading at just 25 cents a share, which could well qualify as "worthless". By March 17 2006, the stock was at $3.75 a share, giving the company a market capitalization of more than $240 million. One can certainly see how a large slug of stock could have been sold for $13.9 million.

And it's lucky that they sold the stock where they did, too. The stock closed today at just $1.38.

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