Most investors who don’t like a particular stock just buy another one. Others look to make money by short-selling the stock -- borrowing someone else’s shares and selling them with the hope that the share price drops.
Intercept Pharmaceuticals has emerged as a big target for short-sellers lately. Over half of the biotech’s outstanding shares have been sold short. Could Intercept’s stock be poised to tumble -- or is the pessimism overdone?
Behind the doom and gloom
The short interest for Intercept’s stock really began to pick up in October 2016, but the biotech hadn’t reported any negative news. In fact, Intercept received good news on Oct. 14, 2016 with the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) adopting a positive opinion recommending approval of Ocaliva in treating primary biliary cholangitis (PBC).
