Around 11:30 AM today, a fellow NCN member pinged me with the following:
WCG- Mergermarkets, Inc is saying that United Healthcare will bid $56 for WCG - Wellcare Health Plans
While I tend to pass on most market rumours and stick to analyst calls etc., this one was almost a sure mover. This one had it all:
- WCG has been long viewed as a buyout candidate.
- Mergermarkets is a solid service and has gotten many calls right over the past years.
- Short interest still stands at 7% of float. Let's assume you're short 200,000 shares and have a credible rumor of a buyout starting to make the rounds. You know there's a fair chance of the rumour being true and being announced over the weekend. So you cover. Covering a 200,000 share block on a August Friday is a short's nightmare (been there personally). So you pay up, pushing the stock up 1-1.5 pts just to get out.
Knowing all this, I quickly gave heads up to the rest of the 50+ NCN members.
The result can be seen here: 2pt+ move to the upside.
This is how Notable Calls Network (NCN) works - sharing the flow. We catch them every day.
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