Market Overview

Short Sellers Pile On Pfizer After Buyout Rumors

Short Sellers Pile On Pfizer After Buyout Rumors
  • Pharmaceutical M&A chatter has swirled this month.
  • Short sellers have piled on to one possible buyer.
  • Its share price rose in the first two weeks of February.

Rumors that Pfizer Inc. (NYSE: PFE) had its eye on not just one acquisition but possibly two have helped lift the company's shares this month. The idea seemed to please the short sellers, who piled on to Pfizer in the most recently reported settlement period.

See also: Under Armour, Tesla Among The Most Notable Stocks For Short Sellers

Between the January 31 and February 15 settlement dates, this New York-based global biopharmaceutical company saw the number of its shares short surge more than 300 percent to more than 137.21 million. But that represents 2.3 percent of the total float, and it was highest level of short interest since last April. At the average daily trading volume as of mid-February, it would take more than five days to cover all short positions.

Carl Icahn is involved with the push for a takeover of Bristol-Myers Squibb Co (NYSE: BMY), but some doubt Pfizer is a serious candidate. Pfizer's share price ended the two-week short interest period more than 5 percent higher, while the Dow saw a gain of more than 3 percent higher in that time. The stock has risen more since then and was up about 5 percent year-to-date on Tuesday. The consensus recommendation of analysts polled by Thomson/First Call is to buy shares.

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