Mattel Stock Sinks on Scathing Short Seller Note

MAT stock is headed for a third straight loss

Apr 22, 2019 at 3:01 PM
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The Dow is headed toward a loss, as Boeing (BA) headwinds offset surging oil stocks. Among other names making notable moves are toymaker Mattel Inc (NASDAQ:MAT), clinical trial software specialist Medidata Solutions Inc (NASDAQ:MDSO), and oilfield services firm Key Energy Services Inc (NYSE:KEG). Here's a quick look at what's moving the shares of MAT, MDSO, and KEG.

Mattel Options Hot as Stock Sells Off

Mattel stock is down 4.7% to trade at $11.91, after founder and co-owner of Bronte Capital, John Hempton, said he was short the toy stock. The short seller cited "seemingly dysfunctional management and too much debt," in part due to Mattel's "extraordinary buyback binge," as well as a "moral failure" stemming from the recall of its Fischer-Price "Rock 'n Play Sleeper" following reports of infant deaths.

Today's drop puts MAT stock on pace for its third straight loss, and brings its month-to-date deficit to 8.1%. The shares have shed 31% since their mid-February peak at $17.27, and are headed toward their lowest close since Jan. 31.

Options traders are in overdrive, too, with 3,294 calls and 1,829 puts on the tape so far -- almost five times the expected intraday amount. The weekly 4/26 14-strike call is most active, and while new positions are being initiated here, it's not clear whether they're being bought or sold.

M&A Buzz Boosts Medidata Solutions Stock to New High

Medidata Solutions stock sailed to a record high of $91.70 out of the gate, and was last seen trading up 12.4% at $88.74. The shares are reacting to a Bloomberg report that French software firm Dassault Systemes is considering buying MDSO to boost its life science division.

Since skimming a 20-month low of $60.10 on Dec. 26, the equity has gained 47.6% -- slicing through previous resistance at the round $80 mark in today's trading. A short squeeze could fuel more upside, too. The 6.81 million MDSO shares sold short represent 12% of the stock's available float, or 13 times the average daily pace of trading.

Goldman Sachs Takes a Stake in Key Energy Services

Key Energy Services shares are up 37.3% to trade at $5.30, following news Goldman Sachs (GS) has taken a 7.5% stake in the energy company. The financial firm said in a Securities and Exchange Commission (SEC) filing the roughly 1.5 million-share purchase was for investment purposes, and may take steps to "bring about changes."

KEG stock is now trading north of a trendline connecting lower highs since mid-March, and is poised to close north of its 140-day moving average for the first time since early August. Though absolute volume is low, the 693 KEG options traded is six times the average daily volume. It looks like speculators are positioning for more upside, with new positions possibly being purchased at the May 5 call.


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