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PreMarket Prep Recap: Qiagen Pulls The Rug Out From Investors Banking On A Deal, Bad Data Equals Bad Price Action For Spectrum Pharmaceuticals

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PreMarket Prep Recap: Qiagen Pulls The Rug Out From Investors Banking On A Deal, Bad Data Equals Bad Price Action For Spectrum Pharmaceuticals

Benzinga's PreMarket Prep show resumed Thursday after a pause for the Christmas holiday. As always, there were a few market movers to cover and two informative interviews.

Qiagen Decides Not To Sell

When you have ownership in a company that decides to put itself up for sale, it can be good news and bad news. Of course, the good news is that speculators will rally the issue to the theoretical price at which the company will sell.

The bad news comes if the stock rallies significantly, but in the end the company decides not to pursue a sale. In that scneario, the shares will often return to the area where they traded before a strategic review was initiated.

On Nov. 14, Qiagen NV (NYSE: QGEN) added to its 5% gain from the previous day, when it was reported by Bloomberg that Thermo Fisher Scientific Inc. (NYSE: TMO) was considering buying the company.

The news instigated a rally that did not end until the issue peaked Dec. 2 at $43.16,. The buyers up to that level were expecting a takeout at that price or higher.

On Thursday before the open, Qiagen announced that it would not be acquired and would remain a standalone business.

As a result, the issue has returned to the area of origin before the takeover rumors surfaced at the $31 area. There is nothing wrong with going long an issue in play, but one needs to keep in mind the downside risk if a deal does not materialize.

There's no harm either in taking some profits in case a potential deal falls through. 

Spectrum Pharmaceuticals Falls On Negative Data

Before the open, Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI) reported that the pre-specified primary endpoint in its Phase 2 trial for Poziotinib in previously treated NSCLC was not met in Cohort 1.

Those who invest in the biotech sector know the story for these companies.

Good trial results lead to a rally, and bad trial results lead to a contraction for the most part. 

For this sector, it is critical to do your homework on the companies, know what drugs they have in the pipeline and when trial results are set to be released.

It's also critical to know whether a company is a one-trick pony and totally reliant on one drug for its long-term success or failure.

A Guest Bonanza On Friday's Show 

PreMarket Prep listeners heard interviews with two excellent guests Thursday. 

Early in the show, Marc Chaikin of Chaikin Analytics reviewed 2019 and discussed the possibility of a 10% correction sometime in 2020.

Later in the show, Tracey Ryenic, a stock strategist at Zacks Investment, discussed value and energy stocks that are on her radar for 2020 — and the issues and sectors she was avoiding.

Friday is the last PreMarket Prep show of 2019, and it will be a guest bonanza. Each guest will share their picks and pans for 2020. The lineup is as follows: 

  • 8:15-8:25 a.m.: JC Parets, founder of AllStarCharts
  • 8:25-8:35 a.m.: Christian Fromhertz of the Tribeca Trade Group
  • 8:35-8:45 a.m.: Anne-Marie Baiynd, author and founder of the TheTradingBook.com
  • 8:45-8:55 a.m.: Dan Forman, executive director at Olivetree Financial

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Posted-In: PreMarket PrepLong Ideas News Technicals Trading Ideas Best of Benzinga

 

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