Buzz Stocks: AbbVie Inc, Staples, Inc., and Facebook Inc (FB)

Today's stocks to watch in the news include ABBV, SPLS, and FB

by Andrea Kramer

Published on Oct 21, 2014 at 9:16 AM
Updated on Apr 20, 2015 at 5:32 PM

U.S. stocks are headed higher ahead of the bell, as traders digest big-cap earnings and data out of China. Among the equities in focus, today's stocks to watch are pharmaceutical firm AbbVie Inc (NYSE:ABBV), office supplies issue Staples, Inc. (NASDAQ:SPLS), and social networking titan Facebook Inc (NASDAQ:FB).

  • Shire PLC (ADR) (NASDAQ:SHPG) is "officially dead" to ABBV -- as a buyout prospect, anyway. AbbVie Inc last night said it pulled the plug on what would have been an epic merger, in the wake of efforts by the U.S. government to curb so-called tax inversion. ABBV -- which is now on the hook to pay SHPG a $1.64 billion breakup fee, and last night announced a stock-buyback program and dividend increase -- is pointed 1.8% higher in pre-market action. The shares have tacked on 3% in 2014, and touched a record high of $60.02 in mid-September, but have since pulled back to flirt with $54.41. Short sellers have been upping the ante on ABBV, with short interest increasing 19.1% during the past two reporting periods. These bearish bets now represent nearly nine sessions' worth of pent-up buying demand, at the security's average daily trading volume.

  • SPLS is the latest U.S. firm targeted for a possible cyber attack. Last night, the company said it's investigating a possible breach of credit card data and that law enforcement has been contacted. Technically speaking, SPLS has surrendered 22.6% in 2014, finishing at $12.30 on Monday. While analysts are firmly in the bearish camp -- not one of the 14 brokerage firms following SPLS deems it worthy of a "buy" -- option players have been picking up calls over puts at an annual-high clip. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 61.04 sits at a 12-month peak. However, it's worth noting that short interest accounts for 11.7% of Staples, Inc.'s total available float, so some of the recent call buying could be the work of short sellers looking for a hedge.

  • Finally, FB is poised to edge 0.8% higher out of the gate, as traders learn of a legal battle between CEO Mark Zuckerberg and several lawyers who represented New York entrepreneur Paul Ceglia. Specifically, the company is suing the attorneys, claiming they knowingly helped Ceglia pursue a fraudulent lawsuit. If today's upside move pans out, it'll be to the dismay of the recent crop of Facebook Inc option bears, who bet on the equity to retreat by the end of the week. In fact, the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.74 sits at an annual peak, as does the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.86, underscoring the bigger-than-usual put bias among near-term speculators. On the charts, FB has soared 40.8% in 2014, landing at $76.95 on Monday. Off the charts, the company will confess its third-quarter earnings after the close next Tuesday.

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