Why Are Investors Selling Shares of These Four Companies?

Team Health Holdings LLC (NYSE:TMH) is down by 4.5% after Amsurg Corp (NASDAQ:AMSG) upped its merger offer by $4 in cash to $15.49 in cash for each TeamHealth share, plus 0.768 AmSurg shares. If consummated, AmSurg’s offer would have a total value of $69.32 per TeamHealth share based on Amsurg’s closing price on October 30. That’s down slightly from AmSurg’s previous offer of $71.47 per TeamHealth share on October 20 because AmSurg’s stock price is a bit lower than before. AmSurg said it will withdraw its offer on Tuesday, November 3 at 4 pm EST if TeamHealth’s board does not engage.

Hedge funds were bearish on Team Health Holdings LLC (NYSE:TMH) during the second quarter. The number of funds with holdings in the stock declined to 22 from 31, while the total value of their holdings increased to just $632.91 million from $601.35 million, despite a greater than 10% appreciation in the stock price during that time, meaning the overall share ownership declined.

Last but not least, Tokai Pharmaceuticals Inc (NASDAQ:TKAI) is down by 13.2% due to a negative Seeking Alpha article. In the article, author Richard Pearson assigns a near-term downside of 60%-70% to the stock, as he thinks Tokai’s trial design will cause the company to fail its phase 3 tests. Pearson notes Tokai recently filed a $150 million S3 registration before the results of the firm’s Phase 3 results are known. If the company proceeds with a secondary offering, Tokai shares will fall due to increased supply in the short term.

Hedge funds were also slightly bearish on Tokai Pharmaceuticals Inc (NASDAQ:TKAI) in the second quarter. Fund ownership decreased to seven from eight while the total value of their holdings in the stock increased to $30.9 million from $28.94 million. However, while the value of stakes rose by about 7%, this was due to the stock gaining over 15% during the quarter, showing that funds actually sold off some of their shares collectively.

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