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What Is Going On With These Falling Stocks?

After opening flat and falling into the red, the broader markets are now in the green this afternoon as investors weigh the overall positive start to earnings season. Among the shares that haven’t rallied back into the green today however, are Chiasma Inc (NASDAQ:CHMA), BofI Holding, Inc. (NASDAQ:BOFI), LG Display Co Ltd. (ADR) (NYSE:LPL), Merrimack Pharmaceuticals Inc (NASDAQ:MACK), and Agrium Inc. (USA) (NYSE:AGU). Let’s find out what is going on with each stock and see how world-class investors were positioned in them heading into this year.

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Micro-Cap falls on Bearish Article

Chiasma Inc (NASDAQ:CHMA) is off by 13.3% this afternoon after The Street’s Adam Feuerstein published a bearish article on the stock. Mr. Feuerstein wrote:

“One of my most reliable (and bearish) investor sources believes the FDA will reject the Chiasma capsules, known as Mycapssa, because data from the company’s pivotal, single-arm study failed to demonstrate a clinically meaningful benefit for acromegaly patients.”

The source that Mr. Feuerstein referenced is shorting Chiasma. On the other hand, Cowen biotech analyst Ritu Baral is taking the opposite stance and believes Mycapssa will be approved. Mycapssa’s PDUFA date for the treatment of acromegaly is tomorrow. Three elite funds on our database held 3.4% of Chiasma Inc (NASDAQ:CHMA)’s float at the end of 2015.

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Blogger Writes Negative Article on BofI

BofI Holding, Inc. (NASDAQ:BOFI) has retreated by 13% on the back of a bearish Seeking Alpha article named ‘The Walls Are Closing In On The Branchless Bank’. The writer notes that a recent securities fraud lawsuit shows almost one dozen former employees making new allegations against BofI. Although the increased number of accusers could make life difficult for the company, the number of elite funds in BofI Holding, Inc. (NASDAQ:BOFI) increased to 22 during the fourth quarter, from 13 at the end of September, so top investors were growing more bullish on the company. Jim Simons‘ Renaissance Technologies owned over 1.2 million BofI shares at the end of 2015.

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On the next page, we examine why LG Display Co, Merrimack Pharmaceuticals, and Agrium Inc are all sliding today.

Selling detected at LG Display 

LG Display Co Ltd. (ADR) (NYSE:LPL), which manufactures display panels in a range of sizes and specifications primarily for use in televisions, notebook computers, desktop monitors, and mobile devices, is down by 6.6% on technical selling and profit taking. Shares of the company have rallied by over 10% year-to-date, easily beating the S&P 500’s performance. 11 hedge funds in our system owned $32.58 million worth of LG Display Co Ltd. (ADR) (NYSE:LPL)’s shares at the end of the fourth quarter, down from 13 funds on September 30, though their holdings increased in value from $21.81 million.

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Merrimack Retreats on agreement with debt holders

Merrimack Pharmaceuticals Inc (NASDAQ:MACK) is 4% in the red today after it entered into a material definitive agreement with certain holders of the company’s 4.50% Convertible Senior Notes due 2020. Under the agreement, the holders have agreed to convert the principal amount of $64,207,000 under the following terms:

“The Company will initially settle each $1,000 principal amount of Notes surrendered for conversion by delivering 136 shares of the Company’s common stock. At the Initial Closing (as defined in the Conversion Agreements), the Company expects to issue an aggregate of 8,732,152 shares of its common stock. In addition, pursuant to the Conversion Agreements, at the Additional Closings (as defined in the Conversion Agreements), the Holders of the Notes will receive a number of shares of the Company’s common stock representing an aggregate of $27,696,332 as additional payments in respect of the conversion of the Notes, such number of shares determined based on the Daily VWAP (as defined in the Conversion Agreements) of the Company’s common stock for each of the trading days in the 10-day trading period following the date of the Conversion Agreements.”

Merrimack Pharmaceuticals Inc (NASDAQ:MACK) was in the portfolios of ten hedge funds in our database on December 31.

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An Analyst Target Price Cut Prompts Some Investors To Leave Agrium

Agrium Inc. (USA) (NYSE:AGU) shares have retreated by 5.2% today after Cowen cut its price target on the stock to $86 from the previous $100 per share. The investment bank kept its ‘Market Perform’ rating, however. Cowen cut its Agrium price target on the belief that corn prices could fall as U.S, Brazilian and Argentine acreage expands in 2016 and 2017. Jeffrey Ubben’s ValueAct Capital was among 22 elite funds tracked by Insider Monkey that held shares of Agrium Inc. (USA) (NYSE:AGU) at the end of December.

Disclosure: None