Weibo Stock Hits Multi-Year Lows After Regulator Fine

Weibo stock is trading at its lowest levels since 2016

Assistant Editor
Dec 14, 2021 at 10:01 AM
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The Cyberspace Administration of China (CAC) fined Weibo Corp (NASDAQ:WB) three million yuan -- or $471,000 -- a decision that's putting serious pressure on the shares this morning. The CAC said that the China-based social networking company repeatedly violated cybersecurity laws and published illegal information. In response, WB was last seen down 4.6% to trade at $28.52 -- its lowest level since July 2016.

Over the last three months, Weibo stock --much like other Chinese tech stocks lately  -- has taken a 42.6% haircut. Now pacing for its eighth loss in 10 sessions, the equity has been pressured lower on the charts by the 10-day moving average in recent weeks, while longer term trendlines contained rallies earlier in the fall months. Longer term, WB sports a 27.1% year-to-date deficit.

Bears are coming out of the woodwork following the regulatory action. The equity's normally quiet options pits have seen 390 puts cross the tape already today, volume that's triple what's typically seen at this point. Most popular by far is the December 30 put, followed by the April 2022 30 put.

That sort of activity actually lines up with today's sentiment. In the last two weeks, 2.15 puts have been picked up for every call at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), a ratio stands higher than all but 2% of readings from the past year. This indicates there an unusually healthy appetite for puts.

 




 
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