Buzz Stocks: FXCM Inc., Depomed, Inc., and The Wet Seal, Inc.

Today's stocks to watch in the news include FXCM Inc (FXCM), Depomed Inc (DEPO), and Wet Seal Inc (WTSL)

by Karee Venema

Published on Jan 16, 2015 at 9:13 AM
Updated on Apr 20, 2015 at 5:32 PM

Futures on the Dow and S&P 500 Index (SPX) have turned slightly higher, following an in-line consumer price index (CPI) reading. Meanwhile, among specific stocks in focus are forex firm FXCM Inc (NYSE:FXCM), pharmaceutical issue Depomed Inc (NASDAQ:DEPO), and specialty retailer Wet Seal Inc (NASDAQ:WTSL).

  • After shedding 15% yesterday to close at $12.63 -- their lowest settlement since Feb. 1, 2013 -- shares of FXCM are down more than 89% in electronic trading. Sparking the sell-off is the fallout from yesterday's surprise currency decision by the Swiss National Bank, which will result in a potential breach of some regulatory capital requirements after FXCM Inc clients suffered a negative equity balance of roughly $225 million. Also pressuring the shares is a downgrade to "underperform" from "outperform" at Credit Suisse, which slashed its price target by $14 to $4. This recent slide should come as a pleasant surprise to traders both in and out of the options arena. Over the past 10 days, speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 89.20 puts for each call. Additionally, nearly 15% of the equity's float is sold short.

  • DEPO is poised to pop 8% out of the gate -- and possibly into record-high territory -- after the company said it is buying the rights to Johnson & Johnson's (NYSE:JNJ) pain drug, Nucynta, for $1.05 billion. The news was well-received among the brokerage bunch, with RBC boosting its price target by $2 to $22, and Roth Capital raising its target price to $25, as well as upping its rating on the equity to "buy" from "neutral." Heading into today's session, the stock was already up an impressive 46.6% year-over-year. As such, another round of price-target hikes could be on the horizon. At present, Depomed Inc's average 12-month price target of $18 stands within striking distance of last night's close at $17.65.

  • One week after announcing the closing of a number of its stores, WTSL said last night it has filed for Chapter 11 bankruptcy. Not surprisingly, the stock -- which has shed nearly all of its value over the past 52 weeks to wallow at $0.08 -- is down 59% ahead of the bell. Against this backdrop, short sellers have been cashing in their winning bets in recent weeks. Specifically, short interest plunged 31.4% during the past two reporting periods, but still accounts for 11.6% of Wet Seal Inc's available float.

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