Stocks On the Move: Cubist, Digital River, Liquidity Services

CBST, DRIV, and LQDT are moving sharply in Monday's trading

Digital Content Group
Dec 8, 2014 at 11:47 AM
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Around midday, three of the top market movers are drugmaker Cubist Pharmaceuticals Inc (NASDAQ:CBST), cloud-commerce concern Digital River, Inc. (NASDAQ:DRIV), and online auctioneer Liquidity Services, Inc. (NASDAQ:LQDT). Here's a quick roundup of how CBST, DRIV, and LQDT are performing on the charts so far.

  • CBST has rallied more than 35% today to hover near $100.68 -- and earlier touched a record high of $101.03 -- after Merck & Co., Inc. (NYSE:MRK) agreed to buy the smaller pharmaceutical issue for $102 per share. Longer term, the shares are now staring at a year-to-date lead of roughly 46%, and exploring triple digits for the first time ever. This is bad news for at least one group on Wall Street -- namely, short sellers. About 6% of Cubist Pharmaceuticals Inc's float is dedicated to short interest, which would take 9.1 sessions to buy back, at the stock's typical daily trading volume.

  • DRIV has plummeted 25.2% so far to waffle around $19.09, nearly wiping out its year-to-date gains. Sparking the sell-off was news that the company extended the deadline related to a digital distribution agreement with Microsoft Corporation (NASDAQ:MSFT). Ahead of these developments, option traders had been upping the bullish ante on Digital River, Inc. The stock's 50-day call/put volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) checks in at 21.58 -- meaning nearly 22 calls have been bought to open for every put during the last few months. What's more, this ratio is higher than 81% of similar readings from the past year, suggesting traders have bought to open calls over puts at a faster-than-usual clip of late.

  • LQDT earlier hit a five-year low of $7.51, and was last seen 24.4% lower at $7.76, after Wal-Mart Stores, Inc. (NYSE:WMT) terminated its deal with the Internet firm -- which LQDT "is contesting," according to a filing with the Securities and Exchange Commission. Also weighing on Liquidity Services, Inc. are price-target cuts to $9 from $12 at Baird -- which reiterated its "neutral" rating -- and to $9 from $11 at BofA-Merrill Lynch, which underscored its "underperform" opinion. This is likely music to the ears of recent options traders. LQDT's 10-day ISE/CBOE/PHLX put/call volume ratio of 8.21 stands higher than 79% of similar readings taken in the last year, hinting at a healthier-than-usual appetite for bearish bets over bullish among speculators.

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