Signet Jewelers Stock Slides After Earnings, Acquisition News

The company will buy Blue Nile for $360 million

Deputy Editor
Aug 9, 2022 at 10:34 AM
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Signet Jewelers Ltd (NYSE:SIG) stock is down 12.6% at $59.15 this morning, after the accessory name cut its full-year outlook following disappointing second-quarter results. Plus, the company announced it will acquire online jewelry retailer Blue Nile for $360 million in an all-cash deal. This negative price action has moved SIG onto the short sell restricted (SSR) list today. 

SIG could have been overdue for a short-term drop, as its 14-day Relative Strength Index (RSI) of 74.9 sits in "overbought" territory. Meanwhile, overhead pressure at the 140-day moving average kept a cap on yesterday's gains.

Still, though short interest has begun to unwind, it still represents a large 15.2% of the stock's available float. Analysts have yet to chime in after the earnings event, with three of the six in coverage carrying a tepid "hold" rating. 

The options pits have been much more bullish than usual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), SIG sports a 50-day call/put volume ratio of 2.76, which ranks higher than all other readings from the past year. 

Today, however, options bears are ruling the roost, with 1,110 puts exchanged so far -- eight times the intraday average and more than double the amount of calls. The August 50 put is the most popular contract, followed by the weekly 8/12 55-strike put, which new positions being bought to open at the latter. 

 

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