Stock Mart: Priority Healthcare

It took just one press release to chop Priority Healthcare's (PHCC Quote) stock in half -- and it wasn't even about earnings.

Priority, which directly distributes high-end drugs and pharmacy supplies to customers nationwide, spiked to 48 3/4 on July 30, and it seemed to have more room to run. Its second-quarter earnings came in three cents higher than analysts' expectations on 60% year-over-year revenue growth, and momentum investors such as Jeff Vinik of Vinik Management were buying up large chunks of the stock. (As of June 30, Vinik owned 419,000 Priority shares, according to Technimetrics.)

But then Caremark, a subsidiary of MedPartners (MDM Quote) and a competitor to Priority in the expanding pharmacy services industry, went on the offensive using what Kai-Teh Tao, a Watson Investment Advisors' portfolio manager, calls only half in jest the "best press release of all time." (Tao's firm owns 100,000 Priority shares.) ...