"Dormant" definately is not a good news for longs,. Don't wait last minute to get out, If you like the company, you can have it at lower price. So even you had it at a higher price of now, cut some shares to limit you potential losses, and buy it back when price lower.
Ask yourself one question: who will buy the share with the BAD news?
If no buyer, then the stock cannot pumped to be higher, then the price will drop, isn't it.
For folks who like long-term hold and wish the share will be $200, I respect your choice. But you have to prepare for the pain of potential pullback
When you see the "dormant" news, I don't think you will jump in and buy,especially at this $154 level. The short squeeze cover slows the stock moving lower. Today is the third today of that big jump, after todays, shorts are assumed to manage their squeeze, and we shall see a big straight line of drop off.
So, any high low is a chance for shorts to jump in and trade. Follow the pattern of "z" shape down turn, shorts can make a lot of trade.
Sentiment: Strong Sell
Bloomberg: Allergan-Salix talks "dormant"
Aug 20 2014, 17:56 ET | About: Allergan Inc. (AGN)
Bloomberg reports Allergan (NYSE:AGN) isn't currently in active buyout talks with Salix (NASDAQ:SLXP). Though Allergan approached Salix about a deal in recent months, the talks are currently "dormant," and Allergan is exploring other options to thwart Valeant's hostile bid.
SLXP -2.7% AH. Shares rose over 15% yesterday after the WSJ reported Allergan has approached Salix about a potential deal. They fell 2.3% in regular trading today.
Why Allergan released the news yesterday? Do they have to tell the public what they are doing?
Most of times we see takeover deal happened overnight. I wondered why Allergan, not Salix tell us the story?
1. Obviously, we know, if Allergan release the news to the public, the stock price will shoot higher. That will not good for Allergan's takeover action. Is Allergan stupid? What is about the stock went up $50 yesterday? Is that good for Allergan at all?
2.It is become suspicious the real goal for Allergan to make such announcement. Is it seriously talking between Allergan and SLXP? or it is just a threat to "another party" that: if you are not co-operate with me, I will chase SLXP?
3. Yesterday, SLXP received an early termination review from the government. SLXP will joint an Italian company to win tax benefit. If Allergan wants to take over SLXP now, obviously, it will stop SLXP move to overseas and stop the tax benefit. If Allergan take over SLXP after SLXP jointed the Italian company, then it is too rush to make a deal "in a month". If finally Allergan decide to buy Italian company and SLXP, then its goal to move overseas, and it is unlikely the US government would approve it.
So I think there will be NO DEAL with SLXP.
SLXP has been the subject of a number of recent research reports. Analysts at Zacks reiterated an “outperform” rating on shares of Salix Pharmaceuticals in a research note on Wednesday, August 13th. They now have a $153.00 price target on the stock. Separately, analysts at Jefferies Group downgraded shares of Salix Pharmaceuticals to a “neutral” rating in a research note on Friday, August 8th. Finally, analysts at Keefe, Bruyette & Woods reiterated an “outperform” rating on shares of Salix Pharmaceuticals in a research note on Friday, August 8th. They now have a $147.00 price target on the stock, down previously from $160.00.
I don't see any reason to buy it at this level. I sold yesterday and will wait for a pullback at $140. Recently, MNST gave me a big lesson: don't to be overexcited. You are not getting broke when you lock your profit.
Here is another section of the article:
Note that the Wall Street Journal article that broke the story on Salix also said that Allergan could strike a deal with "another unknown party." So it is by no means certain that Salix is going to be the one. I don't know whether there are any legal issues because it will take a while before Salix closes the Cosmo deal.
•Salix went up 15% today due to the acquisition rumor. It is not certain that Salix is the one Allergan will acquire.
•The WSJ article (i.e. "people familiar with the matter") also says Allergan might acquire "another unknown party" if not Salix.
These are come from SA article. How come there are so many guys are so sure about the deal and set target by themselves for $180-200?
I hope here nobody is as stupid as the some expert suggested $160 in the next several years' take-over price. The reason is obvious, the deal also involves risk and uncertainty. Take-over may not happen.
Sentiment: Strong Sell