Buzz Stocks: Tesla, Inovio Pharma, Merck & Co.

Today's stocks to watch in the news include Tesla Motors Inc (TSLA), Inovio Pharmaceuticals Inc (INO), and Merck & Co., Inc. (MRK)

Apr 8, 2015 at 9:21 AM
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U.S. stocks are perched modestly higher this morning, as traders eagerly await the latest meeting minutes from the Fed and this evening's unofficial start to earnings season. In company news, today's stocks to watch include electric automaker Tesla Motors Inc (NASDAQ:TSLA), as well as drugmakers Inovio Pharmaceuticals Inc (NASDAQ:INO) and Merck & Co., Inc. (NYSE:MRK).

  • TSLA will begin taking orders today for its upgraded Model S sedan, called the 70D. The car will cost about $5,000 more than the previous base level Model S -- or just under $75,000 -- and will feature all-wheel drive, a longer range, and the potential to upgrade to self-driving technology. Ahead of the bell, Tesla Motors Inc is up 3% on the news, and as of Tuesday's close at $203.25, has tacked on 7.7% month-to-date. Should this rebound continue, it could force short sellers to cover their positions, of which there are many. Specifically, more than one-quarter of TSLA's float is sold short, which would take nearly a week to buy back, at typical daily trading levels.

  • The U.S. Department of Defense has selected INO as the lead contractor on a $45 million program to fight Ebola. The pharmaceutical firm is tasked with developing multiple therapies for the disease, which has killed upwards of 10,000 people. As such, shares of Inovio Pharmaceuticals Inc are on track to pop about 5% out of the gate, which would bring them back into positive year-to-date territory. Last night, the stock closed at $9.08, or 1.1% below 2015 breakeven. One group that could get burned by a show of technical strength is short sellers. One-fifth of INO's float is sold short, and it would take roughly 23 sessions -- or more than a month -- to repurchase all of these positions, given the equity's typical trading volume.

  • Finally, MRK's hepatitis C treatment has been granted "breakthrough therapy designation" by the Food and Drug Administration (FDA), allowing the company to expedite development and review of the combination drug. The shares are benefiting this morning, up 1% in pre-market trading, but longer term, have advanced just 1.1% in 2015 to rest at $57.43. That hasn't stopped options traders from pouncing on Merck & Co., Inc. calls lately. During the past 20 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 5.12 MRK calls for every put.
 

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