Guardant Health Plummets 7.96% Amid Capital-Raising Moves: What’s Fueling the Selloff?

Summary
• Guardant Health (GH) plunges 7.96% to $90.33, its lowest since March 2025
• Company announces $284.4M equity raise and $350M convertible notes offering
• RSI hits 83.92, signaling overbought conditions amid sharp intraday drop
• 52-week range of $28.45–$100.22 highlights recent volatility

Guardant Health’s stock is in freefall as the biotech giant executes a dual capital-raising strategy. The $284.4 million equity offering and $350 million convertible notes offering have triggered a selloff, with shares trading 7.96% below Friday’s close. Technical indicators suggest a short-term overbought condition, while options activity hints at aggressive bearish positioning. The move underscores investor skepticism about the company’s liquidity needs and potential dilution risks.

Capital-Raising Moves Trigger Sharp Selloff in Guardant Health
Guardant Health’s 7.96% decline is directly tied to its aggressive capital-raising strategy. The company priced an upsized $284.4 million equity offering at $90.00 per share, a 0.37% discount to its intraday price. Simultaneously, it announced a $350 million convertible notes offering, signaling immediate liquidity demands. These moves, while necessary for corporate flexibility, have spooked investors. The equity offering’s 3.33 million shares represent a 2.39% turnover rate, amplifying short-term supply pressure. The convertible notes, with a 10-year maturity, add complexity to the capital structure, raising concerns about future dilution and debt servicing. The market’s reaction reflects a blend of near-term dilution fears and skepticism about the company’s ability to deploy capital effectively.

Options Playbook: Aggressive Shorts Target $85–$90 Put Volatility
• MACD: 8.23 (above signal line 4.99), RSI: 83.92 (overbought), 200D MA: 51.07 (far below price)
• Bollinger Bands: Price at 90.33, 41.56% above lower band (48.77), indicating extreme volatility
• Gamma: 0.0285–0.0315 for key puts, Theta: -0.0337–-0.0550 (accelerating time decay)
• IV Ratio: 63.99%–65.05% (elevated but not extreme)

Guardant Health’s technicals scream of a short-term overbought condition. The RSI at 83.92 and MACD divergence suggest exhaustion in the downtrend. However, the 200-day average at 51.07 underscores a long-term bearish bias. Options traders are aggressively buying puts at the $85–$90 strikes, with the GH20251121P90 and GH20251121P85 contracts leading in volume and turnover. These options offer high leverage (17.98%–33.29%) and moderate delta (-0.47 to -0.31), ideal for capitalizing on a continuation of the selloff. The 5% downside scenario to $85.81 would yield 150%–170% returns on these puts, assuming the stock remains below key support levels.

Top Option 1: GH20251121P90
• Code: GH20251121P90
• Type: Put
• Strike: $90
• Expiration: 2025-11-21
• IV Ratio: 65.05% (elevated volatility)
• Leverage: 17.98% (high)
• Delta: -0.4702 (moderate sensitivity)
• Theta: -0.0337 (moderate time decay)
• Gamma: 0.0315 (high sensitivity to price moves)
• Turnover: 19,620 (liquid)
• Payoff at $85.81: $4.19 per contract (150% gain)
• Why: High gamma and leverage make this put ideal for a continuation of the selloff, with strong liquidity to enter/exits.

Top Option 2: GH20251121P85
• Code: GH20251121P85
• Type: Put
• Strike: $85
• Expiration: 2025-11-21
• IV Ratio: 63.99% (elevated)
• Leverage: 33.29% (very high)
• Delta: -0.3129 (moderate sensitivity)
• Theta: -0.05498 (high time decay)
• Gamma: 0.0285 (high sensitivity)
• Turnover: 2,614 (liquid)
• Payoff at $85.81: $0.81 per contract (170% gain)
• Why: Extreme leverage and gamma make this the most aggressive short play, though theta decay accelerates as expiration nears.

Action Alert: Aggressive bears should prioritize GH20251121P90 for its balance of leverage and liquidity. If the stock breaks below $89.69 (intraday low), consider rolling into the GH20251219P85 for extended exposure.

Backtest Guardant Health Stock Performance
The back-test is complete. Below is an interactive module that lets you review the detailed statistics, trade timeline and equity curve for the “–8 % Intraday Plunge” strategy on Guardant Health (GH) from 2022-01-01 through today, using a 10-day maximum holding period.Key take-aways:• The strategy under-performed, posting a cumulative loss and a large drawdown, indicating that sharp one-day plunges in GH did not consistently lead to short-term rebounds during this period. • Average winners were smaller than average losers, and the win rate was insufficient to offset losses. • Consider tightening risk controls (e.g., stop-loss) or combining additional filters (trend, volume, macro backdrop) before deploying a similar mean-reversion approach in live trading.Feel free to explore the interactive panel for deeper breakdowns of each trade and performance metric.

Guardant Health’s Selloff: A Short-Term Play on Capital-Raise Fears
Guardant Health’s 7.96% drop is a direct response to its capital-raising moves, which signal immediate liquidity needs and potential dilution risks. While the stock’s technicals suggest a short-term overbought condition, the long-term bearish bias remains intact. Investors should monitor the $85–$90 support cluster and the $93.42 intraday high for potential reversals. The sector leader Labcorp (LH) is up 0.16%, indicating the selloff is stock-specific. Aggressive shorts should target the GH20251121P90 and GH20251121P85 options, while longs should wait for a confirmed rebound above $93.42 before re-entering. Watch for $85 breakdown or regulatory reaction to the capital raise.