This is a late posting. I have sold my position in VaxGen at $.64/share. I originally opened my position in VXGN in August for $.54share because it was a Net Net stock whose potential was actually in the $.78-$.90 share range. The reason for the sale is actually old news. And like most investment stories it is a good vehicle for beginning investors to learn an important investment lesson. The lesson is one Warren Buffett talks about constantly.  Make sure companies you invest in have Good management that allies itself with shareholders. VXGN management sold out the shareholders literally. Back in October VaxGen agreed to sell itself  to Oxigene Inc (OXGN) and for less than the Net Cash value of the company. In fact the deal gets worse than it sounds, initially. VXGN management sold out a cash fat company to another biotech company, that was cash thin in an all stock transaction. Think it can’t get worse? Wrong. It didn’t sell at a fixed price but as a percentage price of OXGN shares, which was less than the $.7o VXGN was trading at the time of the deal. There were not guarantees for VXGN stockholders. As OXGN has dropped in price so did VXGN. And OXGN dropped in price the same day as the original announcement.

I should have sold immediately. When the value perspective changes negatively, that is a good time to sell. That is the text book time to sell. But I literally couldn’t believe that VXGN sold us out. The mistake I made was getting emotional.

Next, on the yahoo finance message board I learned that two of VXGN executives were getting board seats at OXGN. This despicable behavior has resulted in a lawsuit, which will ultimately, not penalize the VXGN management responsible for this bad deal.

While I was sorting out whether or not OXGN was a company I wanted to own, (I concluded no, partially because of the trust of management issue) the price of VXGN fluctuated. And a strange arbitrage potential between the price of OXGN and VGXN developed.. When that gap closed I sold.

Actually I sold out on November 18th, using a limit order at $.64 my return was about 18% in a little over three months.

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