Pre Market and early morning trading on Wednesday September 9, 2015 proved rather profitable for VVUS share holders. The detection of a particular news item impacted the pre market and opening rotation trades on Vivus Inc. Icahn enterprises LP reported a tender offer for any and all of the outstanding 4.5% convertible senior Notes due 2020. Though the initial impact on the security was comparatively muted, the remainder of the trading proves note worthy.
By the opening bell VVUS was already trading higher by 5%. This particular instance of the Icahn news had not had the usual volume and price action initially seen on other securities. Perhaps somewhat atypical of immediate impacts from Icahn related information, early implementers were rewarded as the morning’s trading progressed.
Approximately 12 minutes after the opening of trading, we began to see volume increase in the equity. Along with price action, the news began to be circulated among trading desks and sites. The move culminated in a 31% gain after 10:00 A.M.
This is an important occurrence in several ways. Traders witnessed a somewhat delayed response among trading desks and other information providers of the VVUS/ Icahn news. Though not typical with other Icahn related news, this type of information tends to impact securities in similar ways. Perhaps the information may not have been initially understood by many participants. Once properly digested by the majority of traders involved in VVUS, the impact was appropriate.
We continue to monitor similar behaviors in various securities relating to company filings, insider transactions, and isolated activist information.
