Buyout Buzz Sends Cynapsus Therapeutics Inc (CYNA) to Record High

Cynapsus Therapeutics Inc (CYNA) agreed to be acquired in a $624 million all-cash deal

by Kirra Fedyszyn

Published on Sep 1, 2016 at 10:25 AM

Canadian pharmaceutical stock Cynapsus Therapeutics Inc (NASDAQ:CYNA) is the Nasdaq's top performer by a mile this morning, shooting 116% higher to $39.67 after private firm Sunovion Pharmaceuticals Inc. agreed to buy the company for $624 million in an all-cash deal. The agreement values CYNA at $40.50 per share -- a previously uncharted level, to which BMO promptly raised its price target.

As it happens, CYNA was surrounded by bullish sentiment even before the buyout news. All four of the brokerage firms tracking the stock already held a "strong buy" recommendation. And short interest represents just 2.8% of the stock's available float. In fact, these pessimistic bets fell by more than 13% during the most recent two-week reporting period.

Meanwhile, though options volume on the stock has been nearly nonexistent, calls account for roughly 98% of the total open interest. Plus, every option bought to open in the last two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) was a call.

Technically, CYNA has deserved all this upbeat attention. Heading into today's session, the shares were already up 20% year-to-date, and had been riding atop support from their 40-day moving average since late May. Obviously, shareholders should be thrilled by recent developments, as today's bull gap earlier put Cynapsus Therapeutics Inc (NASDAQ:CYNA) at an all-time high of $39.74.

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