Rocket (RKT) will acquire the real estate company for $1.75 billion
Redfin Corp (NASDAQ:RDFN) stock is up 74.7% to trade at $10.16 at last glance on news that Rocket (RKT) will acquire the real estate company for $1.75 billion. The deal implies a 115% to the equity's Friday close.
The shares are today pacing for their biggest single-day percentage gain on record, and earlier hit their highest level since December on a bounce off their lowest mark since July. The stock is also breaking above resistance at the 100-day moving average, and sports a 43.6% year-over-year lead.
The options pits are abuzz, with 30,000 calls traded so far today -- 9 times the volume typically seen at this point -- compared to just 12,000 puts. The most active contract is the May 13 call, followed by the weekly 3/14 11-strike call, with positions being opened at the latter.
This denotes a shift in sentiment. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), RDFN's 50-day put/call volume ratio ratio sits higher than 82% of annuals readings. This means options traders have leaned bearish in the last 10 weeks.
An unwinding of pessimism amongst short sellers and analysts could propel the shares even higher. Of the 16 analysts in coverage, 13 call the security a tepid "hold" or worse. Plus, the 18.46 million shares sold short account for 15.6% of RDFN's available float.