Buyout Buzz Boosts Hertz Stock

Spin-off news has sent ALQA to a 15-month high

Nov 28, 2018 at 2:39 PM
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The Dow has shot up more than 500 points this afternoon, as Wall Street reacts to relatively dovish comments from Fed Chair Jerome Powell. Among individual stocks making big moves today are car rental name Hertz Global Holdings Inc (NYSE:HTZ), media giant Discovery, Inc. (NASDAQ:DISCA), and hydrogel specialist Alliqua Biomedical Inc (NASDAQ:ALQA). Here's a quick look at what's moving the shares of HTZ, DISCA, and ALQA.

Options Traders Bet on Bigger Rally for HTZ Stock

M&A buzz is boosting Hertz today, with the shares last seen up 6% at $20.76 on rumors the company's German peer Sixt is interested in a buyout. HTZ stock has been bounding higher since its late-October 14-month low at $13.01, thanks in part to a Nov. 9 post-earnings bull gap. A pullback from here found a quick foothold atop the stock's 80-day moving average, and the shares are now trading above recent highs at the round $20 mark.

The sharp upside move has sparked a rush of options activity, with roughly 17,000 calls and 5,200 puts on the tape -- six times what's typically seen. The bulk of the action has centered at the December 20 and 23 calls, where it looks like new positions are being purchased. If this is the case, call buyers expect HTZ shares to extend today's momentum over the next several weeks.

Tiger Woods Deal Has DISCA Adding to Recent Gains

Discovery said it teamed up with Tiger Woods for a weekly golf instructional series on the company's GOLFTV streaming service, set to launch on Tuesday, Jan. 1, 2019. The media firm is also rumored to be considering moving employees to the Netherlands to guard against a no-deal Brexit.

In reaction, DISCA stock is up 3.3% to trade at $31.13. This positive price action just echoes the equity's longer-term trend, with the shares adding 33% since their late-May year-to-date low of $20.60. And while the security took a breather after its Nov. 8 three-year peak at $34.89, this pullback was cushioned by familiar support at its 100-day moving average.

This surge has turned up the heat on short sellers, with 30.13 million DISCA shares currently dedicated to these bearish bets. This accounts for a healthy 6% of the stock's available float, or nearly seven times the average daily pace of trading. This could create tailwinds for Discovery stock, should these bearish bettors start hitting the exits.

Alliqua Biomedical is Spinning Off AquaMed Technologies

The shares of Alliqua Biomedical have more than doubled today -- last seen 115.9% higher at $3.53, and fresh off a 15-month high of $5.24 -- on news the company plans to spin off its hydrogel manufacturing facility, AquaMed Technologies. More specifically, it will merge with privately held cannabis company TO Pharmaceuticals, and be a publicly traded name heading into today's trading. The $2.80 level had capped all of ALQA's rally attempts since a bear gap in April 2017 -- including the stock's 8.2% surge on Oct. 12, following news the company agreed to be bought by biopharmaceutical name Adynxx.

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