Mazor Robotics Stock Jumps on Medtronic Takeover

Medtronic is buying Mazor Robotics for $1.64 billion

by Patrick Martin

Published on Sep 21, 2018 at 9:53 AM

Mazor Robotics Ltd (NASDAQ:MZOR) stock is up 10% to trade at $57.95 this morning thanks to news that healthcare firm Medtronic (MDT) was acquiring Mazor in a $1.64 billion deal. In response, Needham upgraded MZOR stock to "hold" from "underperform."

Mazor Robotics stock is on track for its fourth straight win, and largest gain since Jan. 3. The equity has been strong since bottoming at an annual low of $41.60 on Aug. 16, and today's price action has the shares trading above their 200-day moving average for the first time since a post-earnings bear gap in early August. 

Shorts have been piling on, even amid this latest rally. Short interest increased by 10% in the last two reporting periods to a record high 3.34 million shares. This represents a healthy 15% of MZOR's total available float, and more than eight days of pent-up buying power. 

Options traders appear to have a strong appetite for calls, despite limited absolute volume. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MZOR's 10-day call/put volume ratio of 12.61 ranks in the 92nd annual percentile, meaning calls have been bought to open over puts at a quicker-than-usual clip. Given the amount of short interest tied up with MZOR, its possible some of the call buying could be attributable to shorts seeking an options hedge.

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