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Trinity Biotech plc (TRIB) Implosion a Boon to Short Sellers

Trinity Biotech plc (ADR) (TRIB) has lost nearly half its value today

Oct 4, 2016 at 12:01 PM
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After being halted earlier, Trinity Biotech plc (ADR) (NASDAQ:TRIB) has gotten demolished, shedding nearly half its value to trade at $6.76. The percentage loss -- which is the biggest of any Nasdaq stock -- was triggered after the diagnostic device maker withdrew its marketing application for a pair of products and announced plans to cut spending. Moreover, earlier TRIB touched a six-year low of $5.76.

Amid the volatility, the stock's intraday volume has already touched an annual peak. The same goes for options volume -- though, on an absolute basis, volume is relatively light, at just 328 contracts on the tape. Plus, TRIB's 30-day at-the-money implied volatility has spiked 127.1% to a 12-month high of 116.5%.

In case there were any doubts, TRIB is on the short-sale restricted list today. However, there are still plenty of bearish bets on the shares. Nearly 8% of the stock's float is sold short, the highest level since February. And, at the equity's average daily volumes, it would take approximately seven weeks to cover these positions. Suffice it to say, these doubters are now sitting pretty.

The brokerage crowd has taken a far more hopeful approach. Six of seven analysts tracking Trinity Biotech plc (ADR) (NASDAQ:TRIB) rate it a "buy" or better, compared to one "hold" and not a single "sell." Plus, the stock's average 12-month price target of $17.50 rests in territory not charted since July 2015. From a contrarian perspective, a well-deserved round of downgrades and/or price-target reductions could trigger TRIB's next leg lower.

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