Shares of Vivus (VVUS) move up 4.2% in premarket trading as the dust still clears from a FDA...

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cubantony Comments (4)
 
it would appear to me that it is blatantly obvious that yesterday's decision by the fda advisory committee to require further testing of qnexa with regard to cardiovascular effects is clearly a negative for vvus. i believe that these tests will be required before a final decision will be rendered and should the tests prove that qnexa is indeed harmful cardiovascularly, vvus would undoubtedly drop 50%. the panel also recommended that not just "healthy" individuals be used, but suggested that persons who are at higher risk, such as the morbidly obese, elderly or persons with pre-existing heart problems be included in the study, thereby increasing the chances of an adverse result. perhaps the stock is up in premarket because i noticed that more calls were being purchased than puts, but eventually, at least for the near term(which could be the next 12 months), i don't see a catalyst to move vvus upwards. i would take profits now and revisit the issue in 6 months.
30 Mar 2012, 08:08 AM Reply Like

MexCom Comments (2836)
 
Shorting highly volatile stocks is not the way to go. I feel sorry for you. Did the broker ask for more margin? Does he actually have the stock to lend to you for the short position. The total daily volume traded is a very large percentage of the total float. With the extra activity in the options market, there probably won't be enough to cover the commitments if options on the call side are exercised.

Don't be surprised if the SEC will impose increased margin requirements. Some accounts are already being closed out because of lack of liquidity and inability to mark to market. For the broker, this is a very small market position but if they handle too many trades on a side opposite of the direction of the market expect to see them go under.

The FDA has to weigh the benefits versus the risks. Overall, the benefit to society with decreased CV disease, diabetes and overall health improvement would make this an election issue if approval should fail.

With increased heart attacks to be suffered by those who shorted the stock prior to approval, they will probably be the first in line to want to get a script for Qnexa if they have enough money left to pay for it.
31 Mar 2012, 06:28 AM Reply Like

benjaminfv Comment (1)
 
I'll get them in one more week
30 Mar 2012, 09:22 AM Reply Like