Performant (PHLT) Soars 114% on Acquisition News – Is This the Final Surge Before Delisting?

Summary
• Performant Healthcare (PHLT) surges 114.65% intraday to $7.62, nearing its 52-week high of $7.74
• Acquisition by Machinify at $7.75/share, 139% above 90-day VWAP, triggers immediate market reaction
• Options chain shows heightened activity in August 7.5 call and September 7.5 put options

Performant Healthcare has captured market attention with a jaw-dropping 114.65% intraday rally, trading at $7.62 as of 7:39 PM. The stock is now within pennies of its 52-week high of $7.74, fueled by an all-cash acquisition offer from Machinify at $7.75 per share. With the deal expected to close by year-end and shares set to delist from Nasdaq, investors are racing to lock in gains before the merger's finalization.

Machinify's $7.75 Buyout Ignites Immediate Liquidity Rush
The acquisition of Performant Healthcare by Machinify at $7.75 per share has created an immediate arbitrage opportunity, with the stock trading at $7.62 as of 7:39 PM. This represents a 114.65% intraday gain from the previous close of $3.55, with the price now just $0.13 below the $7.75 cash consideration. The transaction, valued at $670 million, offers a 139% premium to Performant's 90-day volume-weighted average price, creating a clear catalyst for a liquidity-driven price surge as investors seek to capture the discount to the merger price before the stock delists. The high trading volume of 16.2 million shares further confirms the market's urgency to secure the arbitrage window.

Healthcare Tech Sector Mixed as PHLT Soars on Merger Arbitrage
While Performant Healthcare's stock is soaring on merger arbitrage, the broader healthcare technology sector is showing mixed performance. UnitedHealth Group (UNH), a sector leader, is down 5.8% intraday, indicating that the rally in PHLT is largely stock-specific rather than sector-driven. This divergence highlights the unique nature of the acquisition arbitrage opportunity, where PHLT's imminent delisting and fixed cash consideration create a distinct price dynamic not shared by its peers.

Options and ETF Strategies for the Final Stretch Before Delisting
• 52W High: $7.74 (near strike) • RSI: 31.79 (oversold) • MACD: -0.0333 (bearish) • Kline Pattern: Bullish engulfing pattern

Performant's technicals suggest a short-term consolidation phase as the stock approaches its 52-week high of $7.74. The RSI at 31.79 indicates oversold conditions, while the bearish MACD (-0.0333) and short-term bearish trend signal potential near-term pressure. The bullish engulfing pattern, however, suggests a reversal could be imminent if the stock breaks above key resistance levels. With the stock trading at $7.62 and the merger price at $7.75, the $0.13 spread represents the remaining arbitrage window before the stock delists.

Top Options Picks:
• PHLT20250815C7.5 (Call) – Strike: $7.50, Expiry: 8/15, IV: 28.69%, Leverage: 30.48%, Delta: 0.63, Theta: -0.0188, Gamma: 0.85, Turnover: 6,736
• PHLT20250919P7.5 (Put) – Strike: $7.50, Expiry: 9/19, IV: 29.29%, Leverage: 30.48%, Delta: -0.399, Theta: -0.0003, Gamma: 0.467, Turnover: 11,995

PHLT20250815C7.5 is ideal for capturing the final arbitrage move, with a delta of 0.63 ensuring strong price sensitivity and a gamma of 0.85 for accelerating gains as the stock approaches $7.50. The 30.48% leverage ratio amplifies potential returns, while the 28.69% implied volatility suggests reasonable premium. For downside protection, PHLT20250919P7.5 offers a -0.399 delta with 0.467 gamma, providing limited downside risk if the merger faces regulatory hurdles. Both options have high turnover, ensuring liquidity for entry and exit.

Payoff Estimation (5% upside from $7.62 = $7.99):
• Call Payoff: max(0, $7.99 - $7.50) = $0.49/share
• Put Payoff: max(0, $7.50 - $7.99) = $0 (no gain)

Aggressive bulls should consider PHLT20250815C7.5 into a breakout above $7.65, while cautious investors may hedge with PHLT20250919P7.5 for downside protection.

Backtest Performant Stock Performance
The backtest of PHLT's performance after an intraday surge of 115% shows favorable results, with the 3-Day win rate at 60.42%, the 10-Day win rate at 64.58%, and the 30-Day win rate at 66.67%. The maximum return during the backtest period was 19.07%, which occurred on day 59, indicating that while there is volatility, PHLT can exhibit strong performance in the aftermath of such a surge.

Final Opportunity: Lock in Arbitrage Before Delisting Deadline
Performant's 114.65% intraday surge is a clear signal of the market's urgency to capture the $0.13 arbitrage spread before the stock delists. With the stock trading at $7.62 and the merger price at $7.75, the remaining window is narrow but actionable. Investors should focus on options like PHLT20250815C7.5 to capitalize on the final push toward the $7.75 cash consideration. Meanwhile, UnitedHealth Group (UNH) is down 5.8%, underscoring that PHLT's move is isolated to its merger dynamics. Watch for a breakout above $7.65 to confirm continuation, or a pullback to $7.50 to assess demand for the 7.5 call options. This is a high-conviction, short-term play with a clear endpoint.