Lannett Stock At Bottom Of NYSE After Profit Warning, Lost Contract

The pharma stock is trading at a five-year low

Managing Editor
Aug 20, 2018 at 10:01 AM
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Lannett Company, Inc. (NYSE:LCI) stock is getting crushed today, losing more than half its value to trade at $6.20, the worst stock on the New York Stock Exchange (NYSE), amid a round of ugly headlines. First, the pharma name lost its contract with Jerome Stevens Pharmaceuticals. In addition, the company issued a full-year profit forecast that fell short of analyst expectations. 

Today's drop puts Lannett Company shares in five-year-low territory, and on track for their worst single-session performance ever. Even prior to today's bear gap, though, LCI had been struggling, carving out a channel of lower lows all year. As of Friday's close, the security was staring at a 42% deficit for 2018.

Short sellers are likely cheering the news today, although LCI is currently on the short-sale restricted (SSR) list. Short interest increased by 5.1% in the most recent reporting period, and is a chip-shot from its record high in September. This represents a whopping 58% of its total available float, and 30.8 times the average daily trading volume.

In terms of options data, buyers have been almost exclusively focused on puts, albeit amid light absolute volume. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows 2,269 LCI puts bought to open in the past 10 days, compared to just 26 calls. The resultant call/put volume ratio of 87.27 ranks 1 percentage point from an annual high, indicating puts have been bought over calls at a much faster-than-usual clip during the past two weeks.

 

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