Buzz Stocks: Alibaba Group Holding Ltd, Chimerix Inc, and Valeant Pharmaceuticals Intl Inc

Today's stocks to watch include Alibaba Group Holding Ltd (BABA), Chimerix Inc (CMRX), and Valeant Pharmaceuticals Intl Inc (VRX)

by Alex Eppstein

Published on Dec 28, 2015 at 9:37 AM

Updated on Jun 24, 2020 at 10:16 AM

U.S. markets are off to a rocky start, pressured by a resuming downtrend in oil futures. Among the equities in focus are e-tailer Alibaba Group Holding Ltd (NYSE:BABA), as well as drugmakers Chimerix Inc (NASDAQ:CMRX) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX).

BABA will reportedly invest $1.25 million in China-based food delivery service Ele.me. Early on, the news is being panned on the Street, where the e-tail stock is down 1.3% at $82.65. This is more of the same for Alibaba Group Holding Ltd, which has surrendered over one-fifth of its value in 2015. Should these technical troubles continue, the shares may be vulnerable to downgrades, as 16 of 19 analysts consider them a "buy" or better -- with not a single "sell" rating to be found.

CMRX has plunged 78.4% to trade at $7.70 -- a fresh record low -- after the company's lead drug failed in a late-stage trial. This is great news for option bears and short sellers alike. Specifically, during the last 10 days across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 6.19 Chimerix Inc puts for every call. Likewise, 6.7% of the stock's float is sold short, representing over two weeks' worth of trading activity, at typical volumes.

Embattled biotech VRX is hitting headwinds this morning, after the company announced CEO J. Michael Pearson is on a medical leave of absence due to a "severe case of pneumonia." In Pearson's absence, his duties will be handled by a group of senior executives. Out of the gate, Valeant Pharmaceuticals Intl Inc has fallen 4.4% to $109.04, and has lost 24% of its value this year -- due mostly to Citron Research's short-seller report. This hasn't prevented option traders from betting bullishly. Specifically, VRX's 10-day ISE/CBOE/PHLX call/put volume ratio of 1.66 ranks near the top quartile of its annual range.

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