Weak Report Has MannKind Corporation (MNKD) Bears Betting

MannKind Corporation (MNKD) earlier touched a two-year low, following underwhelming quarterly numbers

by Alex Eppstein

Published on May 8, 2015 at 11:30 AM
Updated on Jun 24, 2020 at 10:16 AM

MannKind Corporation (NASDAQ:MNKD) is fresh off a two-year low of $3.52, following poorly received first-quarter results. At last check, the shares were still down 3.7% at $3.87, and on the short-sale restricted list -- likely disappointing a recent crop of bullish bettors. The sharp move has also invigorated the biopharmaceutical stock's options pits, where intraday volume is five times the norm.

Taking a quick step back, put buying on MNKD has been relatively popular in recent weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The equity's 10-day put/call volume ratio of 0.44 ranks in the 70th percentile of its annual range.

Puts are also being purchased today -- possibly at the in-the-money January 2016 7 strike. The volume-weighted average price (VWAP) of these contracts is $4.08, meaning the potential buyers expect MNKD to settle below $2.92 (strike less VWAP) at January 2016 options expiration -- territory not explored since March 2013.

Looking more closely at the charts, MannKind Corporation's (NASDAQ:MNKD) struggles extend beyond today. Since hitting a Feb. 10 high of $7.88, the shares have surrendered more than half of their value, and are poised to close a second straight month below their 50-month moving average -- something that hasn't happened in more than two years.

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