Pinduoduo Stock Plummets Amid Ramped Up Competition

Year-to-date, PDD has shed more than 60%

Digital Content Manager
Nov 26, 2021 at 10:14 AM
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Chinese e-commerce name Pinduoduo Inc (NASDAQ:PDD) is plummeting today, last seen down 15.2% at $69.01, after posting worse-than-expected third-quarter revenue. The company attributed the disappointing results to competition from Alibaba (BABA), as well as JD.com (JD).

Pinduoduo stock is now trading at annual lows, after earlier today breaching a floor at the $74 level, which contained its August pullback. The equity has been chopping lower on the charts since its Feb. 16, record high of $212.59, and has shed over 60% year-to-date.

The brokerage bunch is mostly optimistic towards the security. Of the seven analysts in coverage, four carry a "buy" or better rating, while three say "hold." Plus, the 12-month consensus target price of $139.45 is an 97.1% premium to its current perch, indicating the equity could be overdue for a round of price-target cuts and/or downgrades in the near future. 

That optimism is not echoed in the options pits, which lean firmly bearish. This is per PDD's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than all but 1% of readings from the past year. This means puts have been getting picked up at a much faster-than-usual pace.

Today's news is only adding fuel to options bears' fires. So far, 14,000 puts and 7,558 calls have crossed the tape, which is eight times the intraday average. Most popular is the 11/26 65-strike put, followed by the 60-strike put in that same weekly series, which expire at today's close.

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