INFN hit a record low out of the gate
Optical networking equipment concern Infinera Corp. (NASDAQ:INFN) is suffering a massive sell-off in early trading, after being pummeled with bear notes following the company's third-quarter revenue miss and disappointing fourth-quarter profit outlook. No fewer than three brokerage firms have slashed their price targets on the stock, including a notable drop to $6.50 from $9.50 at Piper Jaffray. At last glance, INFN is down 31.1% at $4.29 -- fresh off a record low of $4.25 -- pacing toward its worst day since July 2016.
From a broader standpoint, Infinera stock has suffered on the charts, falling more than 65% from its early May peak of $12.39. Plus, INFN has shed 47.4% over the past 12 months, while all recent breakout attempts contained by the 30- and 40-day moving averages.
Some of this recent downside has likely been due to increased pressure from shorts. Short interest on INFN surged more than 28.9% during the past two reporting periods, and now represents 12.3% of the stock's total available float. Short sellers are sidelined today, though, with INFN on the short-sale restricted list.
Against this backdrop, Infinera's options pits are buzzing today, with 1,366 calls and 1,169 puts on the tape -- almost 10 times what's typically seen at this point. The November 5 put is most active, while new positions are being initiated at the November 4 and weekly 12/7 5-strike calls.