Bears Cheer as SEC Probe Pressures Iconix Brand Group Inc (ICON)

The SEC will investigate Iconix Brand Group Inc's (ICON) accounting methods

by Alex Eppstein

Published on Dec 28, 2015 at 10:28 AM

Iconix Brand Group Inc (NASDAQ:ICON) is down 24.2% at $5.66, after the brand management company announced the Securities and Exchange Commission (SEC) has issued a formal order of investigation into its accounting practices. The shares have now surrendered over four-fifths of their value year-to-date, and are on the short-sale restricted list. Today's bearish gap is likely being welcomed in the stock's options pits and beyond.

Digging right in, ICON sports a 10-day put/call volume ratio of 3.63 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Not only does this mean nearly four puts have been bought to open for every call during the past two weeks, but the reading also ranks in the 64th percentile of its annual range.

Meanwhile, short sellers have been piling on ICON. During the last two reporting periods, short interest soared 40.5%. Currently, about 34% of the stock's float is sold short, which would take 6.3 sessions to buy back, at ICON's typical daily volumes.

On top of that, the brokerage bunch is pretty skeptical of the shares. Specifically, 80% of covering analysts rate Iconix Brand Group Inc (NASDAQ:ICON) a "hold."

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