Ligand Pharmaceuticals (LGND) shorts are up $206 million in mark-to-market profits today after Citron Research published a report with a $35 price target on concentration of royalty payments in just four drugs, the largest of which will soon lose patent exclusivity. LGND was down 20% on the news today.
LGND shares shorted has increased by 569k, +8%, in 2019 even as LGND’s stock price declined 22% on the year. LGND short selling picked up in October 2018, with 3.7 million additional shares, +98%, shorted since October 2018.
Shorts are up $209 million in mark-to-market profits today, bringing year-to-date profits to $238 million, +23.54% on the year. Shorts held onto their positions in 2018 even as LGND’s three quarter long rally put them in a $544 million hole, -72%. LGND’s 4th quarter weakness turned 2018 into a profitable year for short sellers, ending up $94 million in mark-to-market profits, +12% for the year.
We are seeing continued short selling today, another 700k in short sales hitting the tape along with a large amount of long shareholder sales rushing out of their positions based on Citron’s report. We should see continued share price weakness in the stock as momentum short sellers continue to jump into the fray and long-term long shareholders, who have already lost of half of their unrealized profits, try to exit their positions with a few shekels left in their pockets.
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Managing Director Predictive Analytics, S3 Partners, LLC
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