Hims & Hers Plummets 6.5% Amid FDA Scrutiny and Partnership Fallout – What’s Next?

Summary
• FDA slams Hims & Hers with a warning letter over compounded drug practices
• Novo Nordisk terminates $6.5B Wegovy partnership, triggering 20%+ intraday drop
• HIMS trades at $50.45, down from $54.3357 highs amid regulatory and reputational risks

Hims & Hers Health (HIMS) is under fire as a perfect storm of regulatory backlash and partnership collapse sends shares tumbling. The stock’s 6.5% intraday decline reflects investor panic over the FDA’s warning letter and Novo Nordisk’s abrupt exit. With the Health Care sector broadly weak and leveraged ETFs amplifying volatility, the path forward hinges on regulatory clarity and market sentiment.

Regulatory Reckoning and Partnership Collapse Spark Sharp Selloff
Hims & Hers’ 6.5% intraday drop stems from twin blows: the FDA’s warning letter over compounded drug sales and Novo Nordisk’s termination of their Wegovy partnership. The FDA accused Hims of promoting unapproved compounded semaglutide, while Novo Nordisk cited 'deceptive practices' and regulatory noncompliance. These events have eroded investor confidence, with the stock trading below its 52-week low of $16.05 and facing existential questions about its business model.

Healthcare Sector Suffers as UNH Slides 1.39% Amid Regulatory Turbulence
The Health Care Services sector is broadly under pressure, with UnitedHealth Group (UNH) down 1.39% as investors reassess regulatory risks. Hims & Hers’ 6.5% decline outpaces the sector’s selloff, reflecting its heightened exposure to FDA scrutiny. While UNH’s modest drop signals sector-wide caution, HIMS’ collapse underscores the fragility of telehealth platforms reliant on unapproved drug formulations.

Options Playbook: Capitalizing on Volatility Amid Regulatory Uncertainty
• 200-day average: $42.22 (below current price) • RSI: 71.4 (overbought) • MACD: 0.66 (bullish divergence) • Bollinger Bands: $38.46–$54.23 (current price near lower band)

HIMS is trading near critical support levels, with the 200-day MA at $42.22 acting as a key psychological barrier. The RSI’s overbought reading suggests short-term exhaustion, but the MACD’s bullish divergence hints at potential rebound. For aggressive traders, the HIMS20250926P48 and HIMS20250926P49.5 puts stand out:

• HIMS20250926P48 (Put):
- Strike: $48 • IV: 79.30% (high volatility)
- Leverage: 29.94% • Delta: -0.338 • Theta: -0.046 • Turnover: 44,240
- Payoff at 5% down: $0.45 (max profit if HIMS hits $48)
- Why it works: High IV and moderate delta balance risk/reward, while high turnover ensures liquidity.

• HIMS20250926P49.5 (Put):
- Strike: $49.5 • IV: 81.35% (extreme volatility)
- Leverage: 20.96% • Delta: -0.424 • Theta: -0.039 • Turnover: 54,093
- Payoff at 5% down: $1.05 (max profit if HIMS hits $49.5)
- Why it works: High gamma and theta amplify sensitivity to price swings, ideal for short-term bearish bets.

Action: Aggressive bears may consider HIMS20250926P49.5 into a breakdown below $48.5. If $48.5 holds, pivot to HIMS20250926C48 for a short-term rebound trade.

Backtest Hims & Hers Health Stock Performance
To run an event-study backtest we first need to agree on the exact rule that identifies a “-7 % intraday plunge.”Common definitions are:1. Close-to-close: the stock’s closing price is at least 7 % lower than the previous day’s close.2. Open-to-low: during the session, the intraday low is at least 7 % below that day’s open.3. High-to-low (pure intraday swing): the day’s low is at least 7 % below the day’s high.Which definition would you like to use? If you’re unsure, option 1 (close-to-close drop ≥ 7 %) is the simplest and uses readily available daily data.Once I have your preference I can pull the data (from 2022-01-01 to today) and run the backtest.

Regulatory Crossroads: HIMS at a Tipping Point
Hims & Hers faces a regulatory and reputational inflection point. The FDA’s warning letter and Novo Nordisk’s exit have exposed vulnerabilities in its business model, but the stock’s technicals suggest a potential rebound from key support. Investors should monitor the $48.5 level and UnitedHealth Group’s (UNH) -1.39% move as sector barometers. For now, the HIMS20250926P49.5 put offers a high-conviction bearish play, while a break above $54.23 could signal a short-covering rally. Watch for $48.5 breakdown or regulatory reaction.