Period between Christmas and New Year is usually marked with thinner liquidity and smaller intensity of market-moving events. End of 2021 is no different with global financial markets experiencing rather small moves during the final week of the year. However, stock of Biogen (BIIB.US) outshined other US large-cap stocks on Wednesday following a share price spike triggered by media reports from South Korea. Let's take a closer look at recent news on the US biotech company.
Biogen shares rally on news from South Korea
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Create account Try a demo Download mobile app Download mobile appBiogen (BIIB.US) was the best performing S&P 500 member on Wednesday with shares rallying over 9%. Moreover, following yesterday's rally, Biogen also became the best performing S&P 500 stock of the week. What caused such a steep share price gain? Media reports from South Korea! According to a report from Korea Economic Daily, Biogen approached Samsung about a potential takeover. According to a report, executives at Biogen are exploring whether a South Korean conglomerate would be interested in acquiring a US biotech company. However, the report did not specify potential takeover price or where it got the information from.
Biogen was S&P 500 top perfomer so far this week. Source: Bloomberg
Samsung denies M&A talks are ongoing
If confirmed, it would be one of the biggest M&A transactions this year, given that Biogen was valued at around $42 billion. However, it looks like the report may have been fake news. Representative for Biogen neither confirmed the news, nor denied it, saying that the company does not comment on media rumours. However, Samsung was more clear. The South Korean conglomerate denied the contents of the report and said that news on potential acquisition of Biogen are fake. Denial issued by Samsung triggered an immediate repricing in the pre-market trading. Current pre-market quotes point to a 6% lower opening of today's Wall Street session for Biogen. One cannot rule out that as M&A news were rejected, Biogen shares will fully erase yesterday's jump.
Shares struggle since July
Biogen has been trading in a downward move since July this year. Stock of the company rallied at the beginning of July after an Alzheimer's drug developed by Biogen was approved by the US FDA. However, slow rollout of the drug as well as high treatment cost made investors revise their expectations and Biogen's share price launched a downward move. A strong rally yesterday allowed the stock to jump above the upper limit of the downward channel. Upward move was halted at the $259.50 resistance zone. Current pre-market quotes point to a drop to around $242 at the opening of today's cash session - still above the upper limit of the aforementioned channel. The nearest support zone to watch can be found ranging above $225.00 handle.
Source: xStation5
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