Spherix Incorporated (NASDAQ:SPEX) is a biotech with a very promising diabetes drug. After statistically significant results on October 7th, 2010, the stock spiked as high as $2.10. During the same day the company announced that institutional investors had purchased $5.25 million in convertible preferred stock and warrants. This killed investors as the stock dumped and turned negative on the day. Many investors viewed this action, during the same day as good news was released, to be hurtful to the average investor who had bought the good news. Since then, the stock has tumbled from $2.10 to its current level at $0.54. At this current level, the stock does seem attractive. In addition, it appears to be making a bottom. The company also said it was actively looking for a partner to help develop the diabetes drug. Any good news could help restore the reputation at SPEX and help investors forget what transpired. Analyzing risk to reward, this stock looks intriguing.