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Behind the Etsy Stock Short Squeeze

Bearish analysts have been quick to chime in on VYGR after a FDA note

Nov 8, 2018 at 3:13 PM
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The U.S. stock market has made a decisive turn lower after the Fed reiterated its plan for gradual rate hikes in today's policy statement, but cautioned over slowing business investment. Among individual names making big moves are online retailer Etsy Inc (NASDAQ:ETSY), gene therapy specialist Voyager Therapeutics Inc (NASDAQ:VYGR), and telecom equipment maker CommScope Inc. (NASDAQ:COMM). Here's a quick roundup of what's moving shares of ETSY, VYGR, and COMM.

Etsy Stock Widens Week-to-Date Gain

Etsy stock jumped to a record high of $54.59 earlier, last seen up 8% at $54.02, as the Amazon rival continues to rally on Tuesday's big earnings win. The shares are pacing toward a 26% weekly gain, which would mark its biggest one-week gain since June.

More broadly, the security pulled back sharply in October alongside the broader equities market, but found support atop its 120-day moving average -- a trendline that caught ETSY's early February retreat and roughly coincides with the equity's mid-June bull gap. Year-to-date, Etsy is up 163.4%.

Short sellers have been crushed during this rally, and a capitulation from some of the weaker bearish hands could create bigger tailwinds for the shares. Short interest on ETSY jumped 24.2% in the two most recent reporting periods to 8.83 million shares -- the most since June 2017.

Five Analysts Cut VYGR Stock Price Target Today

The shares of Voyager Therapeutics are trading down 10.2% at $12.56, fresh off an annual low of $11 -- after the Food and Drug Administration (FDA) said it considers the company's gene therapy for Parkinson's disease to be an "early phase exploratory study." This, as Baird stated in a corresponding note, "should have a substantial impact on the approval timeline," and joined at least four other brokerage firms in lowering their VYGR price targets.

More bearish brokerage notes could come down the pike for the stock that's now staring at a 26.4% year-to-date deficit. While six of the nine analysts covering VYGR stock maintain a "buy" or better rating -- with not a single "sell" to be found -- the average 12-month price target sits all the way up at $27.64.

Arris Buyout Buzz Blasts CommScope Stock

In addition to reporting a third-quarter earnings and revenue miss, CommScope said it is buying set-top box maker Arris International (ARRS) for $7.4 billion in cash. Against this backdrop, COMM stock is down 19.7% to trade at $19.76 -- earlier tapping a four-year low of $18.52 -- pacing toward its worst day since May 1, when it plunged 27.8% in the session subsequent to earnings.

Today's bear gap has sparked a busy day of trading in COMM's relatively quiet options pits. More than 2,700 puts and 2,000 calls have changed hands so far today -- 25 times what's typically seen at this point, and put volume at a new 52-week peak. Most active is the November 21 put, where it looks like speculators are buying new positions to bet on even more downside through front-month options expiration at the close next Friday, Nov. 16.

 
 

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