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Why Ligand Pharmaceuticals Tanked 25%

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Ligand Pharmaceuticals

Today, US pharmaceutical firm Ligand Pharmaceuticals (LGND) fell 25% from yesterday’s closing price to a low of $98.86 for the day. At the same time, other pharmaceutical companies Amarin Corporation (AMRN) and Pfizer (PFE) were up 1.2% and down 0.7%, respectively. As of January 15, LGND stock was already trading in negative territory with 2.9% month-to-date losses against 4.1% and 5.9% gains in the S&P 500 Index (SPY) and the NASDAQ Composite Index (QQQ). Let’s see what could have triggered the massive sell-off in Ligand Pharmaceuticals stock today.

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Citron’s negative view

Earlier today, Citron Research—founded by well-known short-seller Andrew Left—expressed its negative views on Ligand Pharmaceuticals. Citron published a research note with the title “Citron Publishes The Smoking Gun On Ligand Pharmaceuticals.” In the note, the research firm called Ligand’s business model “shots on goal” and said it has been working on LGND “to determine whether the company’s pipeline is legitimate or nothing but a pipe dream.”

Citron severely criticized Ligand, calling it “a company designed for the ‘lazy investor’ whose stock price has 80% downside from its current levels.” Citron gave a price target of $35 for the stock, down about 73.4% from Tuesday’s closing price. You can read Citron’s full report here. Today’s massive sell-off comes as a big blow to legend Ligand ahead of its fourth-quarter earnings, slated to be released on February 7.

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