Bears Hope Offering News Shreds Shake Shack Inc (SHAK)

Shake Shack Inc (SHAK) is pointed lower, after the burger joint announced a 26-million-share secondary offering

Oct 8, 2015 at 9:27 AM
facebook X logo linkedin

Shake Shack Inc (NYSE:SHAK) is pointed 7% lower ahead of the open, after the company announced a secondary offering of 26 million shares. This is just the latest setback for the underperforming stock, something bears -- inside and outside of the options pits -- have picked up on.

Last night, SHACK closed at $48.48. In other words, since hitting a record high of $96.75 in late May, the shares have surrendered nearly half their value. Recent breakout attempts have been contained at the round $50 level -- also home to the stock's 20- and 40-day moving averages, hinting at multiple layers of technical resistance just overhead.

As alluded to, this hasn't been lost on Wall Street. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), SHACK has amassed a 10-day put/call volume ratio of 1.05 -- up from 0.84 two weeks ago. In other words, the rate of put buying (relative to call buying) has accelerated.

Elsewhere, short interest represents a staggering 79.4% of SHACK's float, after increasing 17.3% during the latest reporting period. At the equity's typical trading volume, it would take one week to cover this accumulation of bearish bets.

Analysts, too, have piled on the bearish bandwagon. Of the seven analysts tracking Shake Shack Inc (NYSE:SHAK), not a single one considers it worthy of a "buy" rating. If that's not enough, the restaurant stock's consensus 12-month price target of $45.60 rests below its current perch.

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI