The stock price of Hims & Hers Health (HIMS) has experienced a decrease from October 10 to October 10, 2024, which can be attributed to several factors1:
- Regulatory Changes: The FDA's removal of Eli Lilly's weight-loss and diabetes drugs from the shortage list has impacted HIMS's business model. HIMS had been offering cheaper versions of these drugs, known as compounded drugs, and this removal has constrained its future total addressable market. This news led to a 10% drop in HIMS's stock price23.
- Market Reaction to S&P SmallCap Addition: HIMS's stock price increased by 12.3% on October 7, 2024, in anticipation of joining the S&P SmallCap 600 index. This positive reaction was likely due to the index's potential to increase the company's visibility and attract new investors. However, the stock price then experienced a decline, which may reflect investor concerns about the company's ability to maintain its growth trajectory after the positive sentiment has been priced in53.
- Options Trading Activity: The unusually high options trading volume for HIMS suggests that investors are actively trading the stock, which could be indicative of market volatility or speculation6.
In conclusion, the decline in HIMS's stock price is likely a result of a combination of regulatory changes, market reactions to index additions, and options trading activity.
10/10/2024 03:05pm
