The stock has been extremely volatile over the past week. It sank 72% to $2.50 last Tuesday after U.S. regulators unexpectedly denied approval of its obesity drug Contrave.
Even savvy hedge fund trader Steven Cohen's SAC Capital Advisors, which picked up a 5% stake in the company a day ahead of the FDA decision, was caught by surprise. Buying, however, once again resumed in the stock starting Wednesday, with the share price rebounding to $3.61 on Friday. The stock was last up 8.7% at $3.94. Over 12 million shares were changing hands.
China MediaExpress (CCME) was in the spotlight after CEO Zheng Cheng defended the company against what he said was an attack by short sellers. Shares were up 4.7% to $14.55 after the CEO wrote in a letter to shareholders that short sellers "timed and coordinated their efforts" in "reckless and baseless attacks" against the company. Earlier, the stock rose to as high as $15.94.Last week, Muddy Waters Research accused China MediaExpress of "engaging in a massive 'pump-and-dump' scheme whereby it significantly inflates revenue and profits in order to enrich management through earn-outs and stock sales." Citron Research and Bronte Capital also released similarly bearish reports on China MediaExpress on Jan. 31 and Feb. 1, respectively. The biggest gainer among small-cap stocks was surgical-equipment maker Emergent (LZR). Shares were soaring 38% to $8.41 on volumes of about 300,000 shares after Universal Hospital said it will make a cash tender offer for the company at $8.76 per share after a customary 21-day go shop period. However Emergent is already being served with lawsuits for possible breaches of fiduciary duties by the board in connection to the sale.
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