Below is the income statement of a publicly-traded biotech company from 2004 until 2007:

Year	2004	2005	2006	2007
Revenue	$0	$0	$0	$0
Expenses	$0.2 million	$0.7 million	$2.2 million	$4.8 million

The companys stock was trading for $2 in 2004 and is now trading for $7. Are investors irrational? Should the stock be sold short? Is it possible for a company in the biotech business to be worth something even though it has no current sales? What can justify the billion-dollar values of technology companies which have yet to earn any profits?