Phathom's 13.4% Plunge: Equity Offering Sparks Investor Exodus Amid Biotech Sector Volatility

Summary
• Phathom (PHAT) plunges 13.4% intraday to $15.655, opening at $15.99 after a $130M equity offering announcement
• 52-week high of $18.31 and 52-week low of $2.21 highlight extreme volatility
• Options chain shows 15 contracts with high implied volatility (up to 268.16%) and leverage ratios exceeding 20%

Phathom’s stock has imploded following a $130M public offering announcement, triggering a 12% pre-market selloff. The biotech sector remains under pressure as Amgen (AMGN) declines 3.19%, amplifying concerns over capital-raising strategies in R&D-heavy industries. With intraday trading between $15.15 and $16.06, the stock faces critical technical levels as options traders bet on volatility.

Equity Offering Sparks Investor Exodus
Phathom’s 13.4% intraday collapse stems directly from its $130M public offering priced at $16/share, announced on January 7. The offering includes 6.875M shares and pre-funded warrants, with underwriters retaining a 30-day option to purchase an additional 1.218M shares. Pre-market trading saw shares drop 11.89% to $15.93 as investors anticipated dilution and questioned the $16/share valuation relative to Phathom’s $15.26 50-day moving average. The offering’s timing—just days after the stock closed at $18.08—has triggered panic selling, with institutional ownership at 99.01% exacerbating liquidity pressure.

Biotech Sector Volatility Intensifies as AMGN Slides 3.19%
The biotech sector remains in turmoil as Amgen (AMGN) declines 3.19% intraday, reflecting broader investor caution toward capital-intensive industries. Phathom’s 13.4% drop outpaces AMGN’s decline, underscoring the market’s skepticism toward equity raises in companies with negative operating margins (-145.03%) and an Altman Z-Score of -9.03. While AMGN’s decline aligns with sector-wide profit-taking, Phathom’s collapse is uniquely tied to its $130M offering, which highlights the sector’s fragility amid rising interest rates and regulatory scrutiny.

Options Playbook: Capitalizing on Volatility with PHAT20260116P15 and PHAT20260220P15
• 200-day MA: $10.11 (far below current price)
• RSI: 67.79 (approaching overbought territory)
• Bollinger Bands: Price at $15.655 (near lower band of $13.64)
• MACD: 0.584 (bullish divergence with signal line at 0.614)

Phathom’s technicals suggest a volatile short-term outlook, with the stock trading near its 52-week low of $2.21. The 52-week high of $18.31 and 50-day MA of $15.26 form a critical support/resistance cluster. Options traders should focus on put contracts with high leverage and moderate delta to capitalize on potential downside. Two top picks from the options chain are:

• PHAT20260116P15 (Put, $15 strike, Jan 16 expiration):
- Implied Volatility: 108.58% (high)
- LVR: 20.53% (high leverage)
- Delta: -0.374 (moderate sensitivity)
- Theta: -0.0256 (moderate time decay)
- Gamma: 0.1424 (high sensitivity to price changes)
- Turnover: 392 (liquid)
- Payoff at 5% downside ($14.87): $0.18 per share
- This contract offers asymmetric risk/reward with high leverage and liquidity, ideal for short-term bearish bets.

• PHAT20260220P15 (Put, $15 strike, Feb 20 expiration):
- Implied Volatility: 93.57% (moderate)
- LVR: 9.45% (moderate leverage)
- Delta: -0.383 (moderate sensitivity)
- Theta: -0.0148 (low time decay)
- Gamma: 0.0753 (moderate sensitivity)
- Turnover: 1,117 (liquid)
- Payoff at 5% downside ($14.87): $0.13 per share
- This contract provides a longer time horizon with lower time decay, suitable for investors expecting a gradual decline.

Aggressive bears should prioritize PHAT20260116P15 for immediate volatility capture, while PHAT20260220P15 offers a safer, longer-term play. Watch for a breakdown below $14.52 (30D support) to confirm bearish momentum.

Backtest Phathom Stock Performance
The performance of PHAT after a -13% intraday plunge from 2022 to now has shown mixed results in the backtest. While the 3-day win rate is 52.50%, the 10-day win rate is slightly lower at 50.70%, and the 30-day win rate is 57.88%. The maximum return during the backtest period was 9.53%, which occurred on day 59, indicating that while PHAT has a higher probability of positive returns in the short term, the overall performance after the intraday plunge is somewhat modest.

Phathom’s Crucial Crossroads: Watch $14.52 Support and AMGN’s Sector Signal
Phathom’s 13.4% plunge underscores the risks of equity financing in biotech, with the stock now trading near its 52-week low. The $130M offering has triggered a liquidity crisis, and technical indicators suggest further downside if $14.52 support fails. Investors should monitor the 50-day MA at $15.26 and the 200-day MA at $10.11 for directional clues. Meanwhile, Amgen’s 3.19% decline highlights sector-wide caution, amplifying the need for defensive positioning. Aggressive traders may short PHAT20260116P15 if $14.52 breaks, while long-term holders should wait for a rebound above $16.06 (intraday high) before re-entering.