Surging MannKind Corporation (MNKD) Can't Shake Skeptics

MannKind Corporation (MNKD) has been on fire lately

by Alex Eppstein

Published on May 18, 2015 at 2:23 PM
Updated on Jun 24, 2020 at 10:16 AM

MannKind Corporation (NASDAQ:MNKD) is breaking out once again, up 9.6% at $4.38, amid sector-wide tailwinds. As such, the stock's options are trading at double the usual intraday pace, with calls and puts running neck and neck.

At least one group of speculators isn't sold on the equity, despite its more than 20% jump since last Thursday's close. Specifically, the January 2016 3-strike put is seeing potential buy-to-open activity, suggesting these bettors are counting on the underlying to reverse lower -- and breach $3 -- by January 2016 expiration. Historically speaking, MNKD hasn't explored the south side of that strike since March 2013.

While the stock has put on quite a show of late, it's struggled longer term. In fact, year-to-date, MNKD has shed 16% of its value.

Therefore, it's no wonder MannKind Corporation (NASDAQ:MNKD) is heavily shorted. A lofty 38.6% of the stock's float is sold short, which represents more than four weeks' worth of pent-up buying power, at the average trading rate. Should MNKD extend its recent momentum, a rush of shorts covering their positions could fuel the stock's fire.

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