Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Tuesday, September 26, 2006

Acorda Gapping Up Again After a 282% Gain Again

Acorda (ACOR) is gapping up yet again pre-market. This stock was the small biotech that soared over 250% yesterday after it released positive multiple sclerosis study data. This was a day trader's dream with an average daily volume of about 29,000 shares trading over 23 million shares. The company had a mere $40+ million market cap on Friday and all of a sudden has a market cap of $166 million. It only opened at $6.00+ yesterday and closed at $8.50.

This morning it is trading up at $10.20 pre-market, about another 20% on over 1.5 million shares. This ACOR stock is potentially no longer "shortable" as many trading firms either did not or no longer have it available for shorts. That usually causes firms to do a mandatory covering of shorts and creates margin calls if certain small investors play this the way they used to.

You should probably expect analyst updated calls from Banc of America if they have not already come out with a call. B of A started it with a Buy rating and only a $5.00 target in early August when the stock was merely around $3.40. When these happen sometimes it is a downgrade and sometimes they play catch-up. The stock had lost 1/3 of its value since that call before this massive news propelled the stock up exponentially yesterday. It is likely that he'll take an "I told you so" route if he hasn't already and will probably not want to try to be a hero again in the name.

These exponential biotech gap-ups in a single day are always puzzling, and they always make you wonder who knew what and when.

Jon C. Ogg
September 26, 2006

Powered by Blogger