Why didn’t Pfizer stock jump further after gaining authorization for its COVID vaccine?

Pfizer (NYSE: PFE) they received good news last Thursday that an advisory committee to the U.S. Food and Drug Administration (FDA) recommended Emergency Use Authorization (EUA) for their COVID-19 vaccine. That news was followed by the FDA administering EUA to Pfizer vaccine over the weekend. But Pfizer shares slipped both Friday and Monday after these positive developments. Here Motley Fool Live video recorded on December 11, 2020, head of healthcare and cannabis bureau Corinne Cardina and Fool.com writer Keith Speights discuss why Pfizer stock did not jump after the good news.

Corrine Cardina: Keith, what have you noticed about the market response so far. I was a little surprised to see Pfizer stock just down my hair this morning. Do you think the market might have just applied so far with expectation? Now we just see the catapult in the rearview mirror, what’s going on?

Keith Visits: Well, Corinne, there is an old saying among investors: “Buy the rumor. Sell the news.” I think we are seeing a bit of that today.

Like I said, everyone expects this to happen. Everyone expected the Advisory Committee to recommend approval or recommend approval, instead, for the Pfizer vaccine. Since those expectations were already in the minds of investors, I think once the news came, it was like, “Okay, now what?”

I think that is where we are. We’re at the “OK, now what” level. What now? I think that’s why you saw it too Moderna stocks rise a little this morning as investors are now looking for what’s to come with Moderna. The advisory committee will meet to review their vaccination next week. We always talk about the stock market to look forward. I think that’s exactly what we’re seeing with the movement of some of those stocks in the morning.