Secondary Offering Sinks Acacia Communications, Inc. (ACIA) Again

Acacia Communications, Inc. (ACIA) has been in free fall since the company announced pricing on a secondary stock offering

Alex Eppstein
Oct 10, 2016 at 2:10 PM
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Acacia Communications, Inc. (NASDAQ:ACIA) is spiraling lower this afternoon -- a continuation of Friday's selloff, after the tech company announced pricing on a secondary stock offering at $100 per share. Specifically, ACIA tumbled 8.6% on Friday, and was last seen another 6.9% lower at $93.08. This isn't necessarily a bad thing for all traders, though, considering how popular put options and short selling have been.

For example, the stock's Schaeffer's put/call open interest ratio (SOIR) checks in at 3.02. In other words, put open interest triples call open interest, when looking at options expiring in the next three months. On top of that, eight of ACIA's top 10 open interest positions are puts.

Also, as alluded to, short sellers have been pounding Acacia Communications. During the most recent reporting period, short interest on the stock rocketed 32.5%, and now accounts for more than one-quarter of its total float. Historically speaking, short-interest levels have never been higher -- though, admittedly, ACIA has been publicly traded for only about five months.

About the only signs of optimism toward the shares can be found among analysts. While just five brokerage firms cover the stock, 100% of them maintain a rating of "buy" or "strong buy." Plus, the average 12-month price target on the shares is $114 -- a 22.5% premium to ACIA's current perch.

On the charts, the stock's recent struggles cannot be understated. Nevertheless, Acacia Communications, Inc.'s (NASDAQ:ACIA) losses pale in comparison to its gains since going public in May. Specifically, the shares have quadrupled in value over that short time frame, running as high as $128.73 in early September.

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