Massive Short-Covering Likely on Mead Johnson Shares Tuesday as Formula Tests Negative for Deadly Bacteria

Mead Johnson Nutrition

on Sunday released the results of tests done on a batch of Enfamil Premium Newborn powdered formula. The formula tested negative for Cronobacter, which has been linked to the death of a newborn in Missouri. The Enfamil formula had been suspected as the source of the bacteria, prompting retailers including Wal-Mart, Kroger and Walgreen to pull the Mead Johnson product from shelves. News that company tests show the formula to not be the cause of death, should cause a major short squeeze in Mead Johnson shares when the market reopens on Tuesday. The FDA still has not completed its own review of samples. Mead Johnson shares fell from a high near $75 to a low of $60.62 Thursday on reports of the possible tainted Enfamil formula. Shares closed on Friday at $65.29.