PG&E Stock Up After Buffett Chimes In on Buyout Buzz

SIRI, meanwhile, is lower after earnings

by Karee Venema

Published on Apr 24, 2019 at 3:23 PM

The Dow is trading modestly lower this afternoon as Wall Street weighs the latest batch of blue-chip earnings. Among individual stocks in focus today are satellite radio service Sirius XM Holdings Inc (NASDAQ:SIRI), German software firm SAP SE (NYSE:SAP), and California utility name PG&E Corporation (NYSE:PCG). Here's a quick look at what's moving the shares of SIRI, SAP, and PCG.

Sirius XM Stock Drops on Revenue Miss

Sirius XM stock is down 5.7% to trade at $5.80, after the company reported first-quarter revenue of $1.5 billion -- less than analysts were expecting -- on in-line earnings of 5 cents per share. The shares have found a foothold in the $5.65-$5.70 region, which cushioned pullbacks in January and March, and coincides with SIRI's year-to-date breakeven mark.

SIRI options volume is running hot, with roughly 23,300 calls and 4,100 puts on the tape -- four times what's typically seen at this point. The June 6 call is most active by a mile, and it's possible new positions are being purchased here. If this is the case, call buyers expect SIRI to climb back above $6 over the next two months.

SAP Stock Trades Near Top of Big Board

SAP stock is trading near the top of the New York Stock Exchange (NYSE), up 12.4% at $129.08, and fresh off a record high of $130.16. In addition to the tech firm's upbeat first-quarter earnings, Elliott Management disclosed a $1.3 billion stake in SAP. Several analysts have been quick to chime in, including Oppenheimer, which raised its price target to $135 from $120.

Speculators are piling into SAP's typically quiet options pits, with 3,553 calls and 2,225 puts on the tape, 13 times the average daily volume. Traders may be selling to open the May 130 calls, expecting this level to serve as a ceiling through front-month options expiration at the close on Friday, May 17.

PG&E Puts Short Sellers On Edge

PG&E shares are up 5.3% to trade at $22.67, higher despite Warren Buffett telling CNBC that a potential buyout by Berkshire Hathaway (BRK.A) was "100% not true." This follows a SparkSpread article suggesting the company was interested in purchasing the embattled utility name.

The stock is now up 350% from its mid-January lows -- and poised for just its second close north of its 120-day moving average since last November -- but has yet to fill an early January bear gap.

This positive price action could be putting short sellers on edge. Short interest rose 22.2% in the two most recent reporting periods to 20.68 million shares -- the most in 13 years. This accounts for 4% of PCG's available float, or three times the average daily pace of trading.

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