Wall Street is abuzz today with talk that Allergan may be on the block. Options traders have snapped up 13,000 April contracts--yep, that's 13,000, way beyond the normal volume. Apparently, they were set in motion by a web report that GlaxoSmithKline might be interested in the Botox-maker.
At press time, Allergan stock was up around 10 percent to over $47--after leaping by 13 percent earlier in the day, exceeding its 50-day moving average. Drug stocks in general were up, so some of Allergan's rise could be overall market pressure. And it's true that some analysts have tagged Allergan as a buy lately. And Fast Money yesterday recommended an Allergan buy for first thing today.
But professional traders are the options-buyers that swooped in for those thousands of contracts--and that's not a standard-issue up-market move. So what's going on? GSK won't comment, and Allergan won't either.