TICKER: BMY
BIAS: SHORT
SUPP: N/A
RES: 46.50, 47, 47.50
GAP%: -14
AVGV: 14M
ATR: 1.41
FS%: 2.97
INST.OWN%: 74.8
MARKET CAP: 81.76B
NEWS: In the first blockbuster merger of the new year, Bristol-Myers Squibb (NYSE:BMY) has agreed to acquire Celgene (NASDAQ:CELG) for $50/share in cash plus one BMY common share for each CELG share, valuing the transaction at $74B. CELG shareholders will also receive one Contingent Value Right (CVR) for each share owned to receive a $9 cash payment triggered by the achievement of future regulatory milestones. When the deal is closed, BMY shareholders will own ~69% of the combined company and CELG shareholders will own ~31%. BMY will finance the transaction, expected to close in Q3, with cash on hand and debt. It will also accelerate its repurchase of up to $5B in common stock.
NOTES: The stock gapped down a significant 14% premarket and on the acquisition news. This deal seems extremely signifincant given that that the cost to BMY is $74B while their market cap is $81.76B. My thought is that large institutions who own 74.8% of the stock are adding selling pressure here.
PLAYBOOK: GAP DOWN BREAKOUT SHORT and GAP DOWN MOMENTUM SHORT. I looked for a break of the lows for my initial entry at the semi-whole $46.50 and took profits fairly quickly when momentum showed signs of slowing. I waited for a pullback to VWAP for the next entry at $46.24 and rode the momentum down for over another point.
Execution detail:
Date/time | Symbol | Side | Price | Position |
---|---|---|---|---|
2019-01-03 09:32:49 | BMY | sell | $46.500 | short |
2019-01-03 09:34:47 | BMY | buy | $45.840 | short |
2019-01-03 09:35:29 | BMY | buy | $45.690 | 0 |
2019-01-03 09:40:18 | BMY | sell | $46.240 | short |
2019-01-03 09:49:10 | BMY | buy | $45.290 | short |
2019-01-03 09:51:54 | BMY | buy | $45.020 | 0 |
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