Hyatt Hotels Stock Travels Lower on Equity Offering

The company hopes to fund its recent acquisition of Apple Leisure Group

Assistant Editor
Sep 22, 2021 at 9:18 AM
facebook twitter linkedin

Hyatt Hotels Corporation (NYSE:H) is down 2.5% at $71.85 in pre-market trading, after news that the company has announced an equity offering to fund its $2.7 billion acquisition of Apple Leisure Group. The hotel concern hopes to raise $500 million by offering 7 million shares, which will be priced after today's close. 

The security has been moving lower since its Feb. 25, annual high of $92.13, though the 320-day moving average has caught the stock's worst pullbacks since its November rally. Now seeing pressure at the $76 level, the stock yesterday dipped back below its year-to-date breakeven. 

Analysts are wholeheartedly bearish on Hyatt stock. Of the 11 in coverage, 10 carry a "hold" rating, while one says "strong sell." Meanwhile, short interest represents a hefty 8.2% of the stock's available float. It would take over six days to buy back these bearish bets, at H's average pace of trading. 

The options pits echo this pessimism. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 6.07 puts have been picked up for every call in the last 10 days. This ratio stands higher than all readings in the stock's annual range, indicating puts have never been more popular than usual over the last two weeks.


Special Offers from Schaeffer's Trading Partners