Bears Close In On Tesla; Software Stock Loses Half Its Value

Britain's Micro Focus International is getting destroyed

by Josh Selway

Published on Mar 19, 2018 at 2:11 PM

A nasty sell-off in tech stocks is dominating U.S. markets today. Among individual names making notable moves are electric automaker Tesla Inc (NASDAQ:TSLA), drug stock Heron Therapeutics Inc (NASDAQ:HRTX), and software issue Micro Focus International (NYSE:MFGP). Here's a quick look at what's driving shares of TSLA, HRTX, and MFGP. 

TSLA Stock Breaches Key Moving Average

Tesla stock is under pressure today, falling 3.3% to trade at $310.88, after Goldman Sachs reiterated its "sell" rating. The brokerage firm expects the shares to fall to $205 over the next six months -- a drop of 34% from current levels -- due to a disappointing Model 3 roll-out. Elsewhere, Jefferies upped its own price target to $250 from $240.

Still, TSLA stock is pacing for its first close below the 320-day moving average in over a year, and the shares are testing their year-to-date breakeven level. It appears at least one Tesla options trader is expecting more downside in the coming weeks, with what appears to be a bearish put spread initiated today using the weekly 3/29 285- and 300-strike puts.

Heron Therapeutics' Anesthetic Could Help Fight Against Opioids

Shares of Heron Therapeutics are up 27.2% at $27.35, earlier reaching a two-year high of $32.70, after the company announced positive late-stage trial results for its HTX-011 non-opioid anesthetic. The company plans to submit a new drug application (NDA) to the Food and Drug Administration (FDA) later this year, with CEO Barry Quart saying the anesthetic "could have a significant impact on the opioid crisis."

HRTX stock is up almost 90% during the past year, doing most of its work in the past four months. While all covering analysts have "buy" ratings on the security -- including Mizuho, which this morning raised its price target to $35 from $28 -- a number of short sellers are getting crushed, with over 16% of the total float sold short. At the equity's average daily trading volume, it would take more than eight sessions to buy back these bearish bets.

Ugly Update, CEO Exit Sinks MFGP Shares

Micro Focus International stock has surrendered nearly half its value today to trade at $13.97, earlier bottoming at an all-time low of $12.85. The company just cut its full-year revenue outlook and announced the departure of its CEO, while adding its integration of recently purchased Hewlett Packard Enterprise assets has been "harder than we'd anticipated."

Adding insult to injury was a downgrade to "hold" from "buy" at Numis. As such, MFGP -- which began trading publicly in the U.S. back in August -- is the biggest loser on the New York Stock Exchange today. The shares traded as high as $36.21 back on Nov. 21.

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