I think the explanation here is that sadly, innovation does not always lead to success for its innovators, at least not immediately. Several of the underperforming companies are doing very innovative things, but their stock price could be lagging because of internal scandal, bad timing/location, bad investments, or just the state of the economy in general (smaller luxury market, etc.). The first to market always has a significant advantage, but as history has shown (Netscape, Creative Nomad Jukebox), that advantage is not everything.<p>Affymetrix, for example (AFFX, -43% vs S&#38;P) is working on making different medical treatments for different people based on genetic variations (metabolization rate, etc.). However, much of their work is still experimental, and they reported a significant negative net profit in Q4 2008 (<a href="http://www.google.com/finance?q=NASDAQ:AFFX&#38;fstype=ii" rel="nofollow">http://www.google.com/finance?q=NASDAQ:AFFX&#38;fstype=ii</a>). They were and are a speculative investment, and their stock price reflects the market's skepticism that they will capitalize on their innovation.<p>That said, it almost certainly is innovation, and it will inform and inspire future scientists who may eventually make it profitable.<p>Additionally, many of these companies target what the UN calls "developing countries" and the stock market calls "emerging markets". These are long term investments, based on worldwide trends of previously poorer countries (BRIC) "emerging" into Western standards of living and, consequentially, becoming consumers of our shit. While these may be profitable eventually, their "innovation" may be just learning the needs of a new, poorer but still technologically literate market.<p>Also, some of these are just poor calls on FC's part. Nokia 2 years in a row?!? Come on.