Medtronic Plummets 2.9% Amid Activist Investor Shake-Up and Earnings Volatility: What’s Next for the Med-Tech Giant?

Summary
• Medtronic (MDT) plunges 2.9% to $90.10, trading below its 52-week low of $79.29
• Activist investor Elliott Management becomes largest shareholder, triggering board reshuffles
• Q1 FY26 revenue hits $8.58B, beating estimates but EPS guidance raised to $5.60–$5.66
• Options chain shows surging demand for deep-out-of-the-money puts and calls ahead of August 29 expiration

Medtronic’s stock tumbled sharply in after-hours trading following a seismic shift in corporate governance and mixed earnings results. The medical device giant reported robust top-line growth but faced immediate sell-off pressure as activist investor Elliott Management seized a board seat. With the stock trading near its 200-day moving average and key support/resistance levels in play, traders are scrambling to position for volatility ahead of critical regulatory and strategic developments.

Activist Investor Infiltration Sparks Governance Uncertainty
Medtronic’s 2.9% intraday decline was catalyzed by Elliott Management’s aggressive board appointment and strategic overhaul. The activist firm’s 4% stake and new board members, including BD veteran John Groetelaars, signal a push for operational and strategic repositioning. While Q1 FY26 results showed 4.8% organic revenue growth and 5% EPS guidance hike, the market reacted negatively to the sudden governance shift. Elliott’s involvement often precedes aggressive cost-cutting or asset sales, raising concerns about short-term disruption. Additionally, the stock’s 4% pre-market drop suggests institutional selling ahead of the board’s restructuring announcement.

Options Playbook: Capitalizing on Volatility with MDT20250829P89 and MDT20250829P90
• 200-day average: 87.26 (below current price)
• RSI: 51.67 (neutral)
• MACD: 0.94 (bullish divergence)
• Bollinger Bands: 94.22 (upper), 91.64 (middle), 89.07 (lower)
• Support/Resistance: 89.65–90.03

Medtronic’s technicals suggest a short-term range-bound pattern with potential for a breakout. The stock is trading near its 200-day moving average and key support at $89.65, with resistance at $90.03. Given the elevated volatility (32.7%–45.25% implied volatility across options) and the activist-driven uncertainty, traders should focus on options with high leverage and gamma sensitivity. Two top picks from the options chain are:

• MDT20250829P89
- Type: Put
- Strike: $89
- Expiry: 2025-08-29
- IV: 23.99% (moderate)
- LVR: 86.50% (high)
- Delta: -0.386 (moderate sensitivity)
- Theta: -0.018 (slow decay)
- Gamma: 0.102 (high sensitivity to price moves)
- Turnover: 28,719 (liquid)
- Why it stands out: This put offers 86.5% leverage with a delta that balances directional exposure and time decay. If MDT breaks below $89, the option’s gamma will amplify gains as the delta approaches -1.0. A 5% downside scenario (to $85.60) would yield a 54% payoff (max(0, 85.60 - 89) = $3.40).

• MDT20250829P90
- Type: Put
- Strike: $90
- Expiry: 2025-08-29
- IV: 24.39% (moderate)
- LVR: 59.18% (moderate)
- Delta: -0.491 (high sensitivity)
- Theta: -0.008 (minimal decay)
- Gamma: 0.105 (high sensitivity)
- Turnover: 28,450 (liquid)
- Why it stands out: This put’s -0.491 delta and 0.105 gamma make it ideal for a bearish bias. With minimal theta decay, it retains value even in sideways trading. A 5% downside scenario (to $85.60) would yield a 60% payoff (max(0, 85.60 - 90) = $4.40).

Trading Setup: Aggressive bulls may consider MDT20250829C89 into a bounce above $90.03, while bears should watch for a breakdown below $89.65. The options chain’s liquidity and leverage ratios make these contracts ideal for directional bets.

Backtest Medtronic Stock Performance
The 3-day win rate for MDT after an intraday plunge of -3% is 50.79%, with an average return of 0.10% over the next three days. The 10-day win rate is 50.47%, with an average return of 0.31% over the next ten days. The 30-day win rate is 49.84%, with an average return of 0.77% over the next thirty days. The maximum return during the backtest was 1.63%, which occurred on day 59 after the initial plunge.

Act Now: Position for Elliott-Driven Volatility and Strategic Realignments
Medtronic’s near-term trajectory hinges on Elliott Management’s strategic playbook and regulatory outcomes for its PFA and diabetes spinoff. The stock’s 2.9% drop has created a test of key support at $89.65, with a breakdown likely to trigger deeper selling. Conversely, a rebound above $90.03 could reignite bullish momentum. Traders should monitor the options chain’s liquidity and leverage ratios for directional clarity. Meanwhile, sector leader Boston Scientific (BSX) is up 0.54% on the day, suggesting broader med-tech resilience. Action: Buy MDT20250829P89 for bearish exposure or watch for a $89.65 support break to trigger a short-term sell-off.