Weight Watcher Shares Gain Amid Takeover Talks
Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.
Weight Watchers International, Inc. (NYSE: WTW) shares were trading higher by $0.77 (17.6 percent) at $4.86 in Monday's session. One trading session removed from making its all-time low ($4.05), the issue is trading up sharply on rumors of takeover talks being held.
The hint of a takeover or merger of the company may have sent some the shorts in the issue scrambling for cover. With a short percent float of 43.27 percent and a short interest ratio (days to cover) at 11.1, some of the shorts may have decided to book some profits.
This was evidenced by the spike in trading volume as over 4 million shares have already changed hands compared to its 20-day average of 1.54 million, with three hours remaining in the session.
The initial surge in pre-market trading took the issue to $5.60, from its all-time low close on Friday at $4.09. However, investors looking for a pop to exit the issue seized the opportunity.
During the regular session, it opened at the exact high for the day ($5.22) and retreated to $4.65 before rebounding to its current level. The current high coincides with its June 24 high ($5.24).
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