Steven Milloy, of The Junk Science Page, has comments on California's Prop 71, which promises to encourage research in embryonic stem cells. He doesn't dwell on the science of embryonic stem cells in this piece, but rather on the possible motives of those who are behind the proposition.
At the risk of committing a Bulverism, he points out that a lot of the money generated by Prop 71 will go to benefit a number of private concerns, including one in which one of Prop 71's boosters holds a number of stock options.
StemCells Inc. has a stock price of $2/share, down from $15/share in 2000, but up from $1.24/share this past summer. If 71 passes, the price could easily pass $5.25/share, the price at which those stock options are worth anything.
At this point, what happens is going to depend on how the people who hold these options feel about the chances for stem cell research. If they think the influx of money will result in real progress, they'll stay in and bet their stock appreciates.
If, on the other hand, they don't think embryonic stem cell research will pay off, they'll cash in before the lack of success becomes obvious to everyone else, and the price of the stock will drop fairly quickly.
Given how well embryonic stem cells have performed in the past, Prop 71 may force Californians to pay $3 billion for a deflating balloon. If private investors want to gamble on this, they're welcome to. Just not with my money.
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