US pharma soothes short sellers’ aches 24 August 2017London Reporter: Jenna Lomax
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American pharmaceutical company Lannett is this week’s high conviction short play among companies announcing earnings, with 30.2 percent of its shares out on loan to short sellers, according to IHS Markit.
The result reflects the ongoing uncertainty in US generics pricing, which drove the company’s shares down by 18 percent in its last earnings update.
Drug supplier Aceto has suffered similar problems, with its shares halving from their peak after a string of disappointing earnings, although 8.1 percent are still out on loan.
Simon Colvin, analyst at IHS Markit, stated: “This significant slump hasn’t satiated short sellers, as the proportion of the company’s shares out on loan continues to remain high.”
The European energy sector’s ongoing consolidation and recapitalisation have made it a fertile ground for arbitragers, according to IHS Markit.
Premier Oil recently issued a large amount of convertible bonds, which has driven the demand to borrow above 30 percent of shares outstanding—10 times the levels experienced 12 months ago.
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