Concordia international is considering a buyout option - does it sound like "Concordia's stock is worth 50% more than now"? For me it doesn't, but it looks like people read this news exactly that way. That's ridiculous, because the market has already showed so many times how the stock could drop when the buyout rumors are not confirmed.
Shares of Concordia Int'l (
The move is being discussed as an alternative to a leveraged buyout as the company has $3 billion in debt and faces ongoing drug pricing regulations.
Do you remember how RLYP dropped when traders understood that buyout might not happen? The same could happen here as well. This punishment could hurt even more than your stock price is less than $6-7. Concordia is evaluating different options for raising funds, but it doesn't mean that the company's stock is worth more than its current price. Current market conjecture shows that basically even some crazy projects could raise funds - I hope you still remember
Market is irrational, CXRX jump is another proof of it. I'd better go and buy some put options here.