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Investors Rewire Stock Trades to Find Trillions in Hidden Assets

Oct. 22, 2020, 11:54 AM

Ask Moderna Inc. bulls how the money-losing biotech firm has just become a $28 billion stock, and they’ll play up its status as a frontrunner to deliver a drug that ends the pandemic.

While the company holds equipment and cash, what makes investors so willing to shell out is its promise in research and development. Yet under rules established since 1975, accountants treat R&D not as an asset of identifiable value on the balance sheet, but as an expense that reduces corporate earnings.

Now, big Wall Street names are pushing back. From MFS Investment Management to Wellington Management, they’re shaking ...