Absci Plunges 18.8%—What’s Fueling the Selloff Amid AI Drugmaker’s $50M Raise?

Summary
• Absci (ABSI) announced a $50M public offering at $3.00/share, a 14.5% discount to Thursday’s close of $3.51.
• Intraday price hit a 52-week low of $2.59 and traded as high as $2.93, reflecting volatile sentiment.
• Turnover surged to 10.98 million shares, with RSI at 69.68 and MACD crossing into positive territory.
• The stock’s 2.8499 price point sits just above the Bollinger Band lower bound of 2.147, signaling extreme bearish pressure.

Today’s 18.8% drop in Absci underscores the market’s mixed reaction to its aggressive capital raise. The biotech’s AI-driven drug platform faces skepticism as investors weigh the dilution risk against long-term innovation potential. With key technical levels and options volatility spiking, the coming hours will test whether this selloff is a buying opportunity or a warning sign.

Discounted Offering Sparks Investor Panic
Absci’s 16% selloff stems directly from its $3.00/share public offering, a 14.5% discount to its previous closing price of $3.51. This steep markdown triggered immediate skepticism about the company’s valuation and capital efficiency. Investors interpreted the move as a signal of desperation rather than confidence, with the $50M raise now representing a 28.5% dilution of existing shareholders’ equity. The offering’s 30-day over-allotment option for an additional $7.5M further amplified concerns about potential future share pressure. While the company claims funds will bolster its AI drug platform, the market’s reaction suggests doubts about the platform’s commercial viability and the management’s capital allocation strategy.

Biotech Sector Sinks with Absci’s Lead
The biotech sector mirrored Absci’s decline, with Amgen (AMGN) down 1.2% despite no direct link to the generative AI drugmaker’s offering. Sector-wide jitters reflect broader concerns about regulatory scrutiny and profit-taking ahead of the FDA’s upcoming oncology guidance. While Amgen’s dip stemmed from macroeconomic worries, Absci’s selloff highlights sector-specific risks tied to speculative AI-driven biotechs. The 3.2916 200-day MA for AMGN contrasts sharply with Absci’s 2.8801, underscoring divergent investor sentiment between established players and high-risk innovators.

Options and ETF Plays for a Volatile Biotech Bet
• 30D MA: 2.8523 (below price), RSI: 69.68 (overbought), MACD: 0.180068 (bullish), Bollinger Lower: 2.147 (near-term support)
• Key levels: 2.57–2.59 (immediate support), 2.877 (middle Bollinger Band), 3.606 (resistance). Short-term bearish bias but long-term range-bound.
• Leveraged ETF data missing, but options volatility (IV at 100.15%–113.86%) suggests high conviction in near-term swings.

Top Options Picks:
• ABSI20250815P3 (Put, $3 strike, Aug 15 expiry):
• IV: 113.86% (extreme volatility)
• Delta: -0.493352 (moderate sensitivity to price drop)
• Theta: -0.003688 (slow time decay)
• Gamma: 0.493643 (high sensitivity to price acceleration)
• Turnover: 6,223 (liquid)
• Leverage: 7.61% (moderate)
• Payoff: At 5% downside (2.7074), max profit = $3 - 2.7074 = $0.2926 per share. Ideal for capturing a sharp post-announcement move.
• ABSI20250815C3 (Call, $3 strike, Aug 15 expiry):
• IV: 100.15% (high but stable)
• Delta: 0.493217 (moderate sensitivity to rally)
• Theta: -0.008831 (rapid time decay)
• Gamma: 0.561188 (high sensitivity to acceleration)
• Turnover: 8,939 (highly liquid)
• Leverage: 12.04% (aggressive)
• Payoff: At 5% downside, max loss = $0. But if price rebounds to $3.00, potential gain = 2.7074 - $3 = -$0.2926 (risk-reward asymmetry).
• Hook: Aggressive bulls may target ABSI20250815C3 if price bounces above 2.877 (Bollinger middle) with 12.04% leverage. Bears should short ABSI20250815P3 if 2.57 support breaks, using 7.61% leverage to amplify gains.

Backtest Absci Stock Performance
The backtest of ABSI's performance after an intraday plunge of -19% shows mixed results. While the 3-day win rate is 50%, the 10-day win rate is slightly lower at 48.78%, and the 30-day win rate improves to 53.06%. The average returns over these periods are negative, with a -0.24% return over 3 days, a -0.11% return over 10 days, and a 2.12% return over 30 days. The maximum return during the backtest was 5.80% over 59 days, indicating that while there is potential for recovery, the path to recovery can be lengthy.

Act Fast on ABSI’s Deteriorating Structure
Absci’s 18.8% drop signals a breakdown in its short-term technical structure, with the 2.57–2.59 support level now critical. The $3.00 offering price creates a psychological ceiling, while the 200-day MA at 3.2916 remains out of reach. Investors should monitor Amgen’s -1.2% move as a sector proxy and watch for a test of the 2.147 Bollinger lower band. If the stock closes below 2.57, the short-term bear case strengthens. For now, the top options play is the Aug 15 $3 put (ABSI20250815P3) for a 5% downside scenario. Watch for a potential 100.15% IV spike if the selloff intensifies.