Citron Research said Mallinckrodt is "on its way to zero"
It's a mixed trading session on Wall Street today, though the Nasdaq Composite (COMP) hit a record high earlier. Among names making big moves are healthcare stocks Mallinckrodt PLC (NYSE:MNK), Bristol-Myers Squibb Co (NYSE:BMY), and bluebird bio Inc (NASDAQ:BLUE). Here's a quick look at what's moving shares of MNK, BMY, and BLUE.
MNK Stock Sinks After Latest Citron Research Swipe
MNK stock is trading down 5.1% at $40.47 -- the biggest decliner on the S&P 500 Index (SPX) -- following scathing words from Citron Research. The noted short seller said the stock is "on its way to zero," after an Express Scripts executive called Mallinckrodt's H.P. Acthar Gel "vastly overpriced for the value." In addition, the Citron report compares Mallinckrodt to Enron.
Citron initially unveiled a short MNK position in 2015, and last November accused the drugmaker of "committing securities fraud." And though the stock is down 40% since its Nov. 15 close, not a single one of the 13 analysts covering Mallinckrodt stock maintain a "sell" recommendation. This leaves the door wide open for downgrades, which could pressure MNK shares even lower.
BMY Stock Sinks After ASCO Disappointment
Bristol-Myers Squibb stock is also near the bottom of the SPX, down 4.5% at $52.51. The company presented an update for its Opdivo-Yervoy combination lung cancer treatment at the American Society of Clinical Oncology's (ASCO) annual meeting, but analysts weren't impressed, with Barclays and Credit Suisse highlighting a lack of clarity.
While BMY stock has faced increasing pressure from its 200-day moving average for most of the last 12 months, the shares are now trading below their negative 10% year-to-date mark. Against this backdrop, short-term Bristol-Myers Squibb options traders are more put-heavy now than they've been at any other point over the past year, per the stock's Schaffer's put/call open interest ratio (SOIR) of 0.90 -- an annual high.
BLUE Stock is Ripe for a Short Squeeze
Celgene and bluebird bio gave an update on their joint multiple myeloma treatment, bb2121, at ASCO, sending BLUE shares up 10.1% to trade at $92.62. This positive price action is just more of the same for bluebird bio stock, which is boasting a nearly 51% year-to-date lead. BLUE stock is a prime candidate for a short squeeze, too, considering 19.3% of its float is sold short, or 14 times the average daily pace of trading.