PETS Soars 84% on $4 Buyout Bid – Is This the Catalyst for a New Era?

Summary
• PetMed Express (PETS) surges 84.46% intraday to $3.265, trading near its 52-week high of $5.80.
• SilverCape Investments proposes $4/share cash buyout, a 126% premium to PETS’ previous close of $1.77.
• Turnover spikes 671% to 99.67 million shares, signaling intense short-term speculation.
• Technicals show RSI at 56.8, MACD near zero, and Bollinger Bands squeezing as volatility accelerates. This explosive move hinges on whether the board accepts the unsolicited offer, which could redefine PETS’ valuation trajectory.

Unsolicited $4/Share Buyout Proposal Ignites Volatility
The 84.46% intraday surge in PETS stems directly from SilverCape Investments’ non-binding $4/share cash acquisition proposal, disclosed via SEC filings on December 11, 2025. At a 126% premium to PETS’ previous close of $1.77, the offer represents a potential 224% upside from the current price of $3.265. While the PetMeds board has not formally accepted the proposal, the public disclosure by SilverCape triggered immediate speculative buying. The stock’s 52-week high of $5.80 now looms as a psychological barrier, with the buyout price acting as a de facto floor for short-term traders. The absence of financing contingencies in the proposal further amplifies its perceived credibility, though the board’s fiduciary review process remains a key uncertainty.

Options Playbook: Leverage the Buyout Narrative with Gamma-Driven Calls
• Technical Indicators: 200-day MA at $3.16 (just below current price), RSI at 56.8 (neutral), MACD histogram at 0.021 (bullish crossover pending).
• Key Levels: Intraday high at $3.46, 200-day support at $3.10, 52-week high at $5.80.
• Options Focus: Aggressive bulls should target the PETS20260618C2.5 call option (strike $2.50, June 2026 expiry) with 2.78% leverage and 74.8% delta. This contract offers 266.67% price change potential and 97.52% implied volatility, aligning with the buyout-driven bullish case. For downside protection, the PETS20260618P2.5 put option (delta -24.6%, gamma 0.193) provides asymmetric value if the board rejects the offer.
• Payoff Analysis: A 5% upside to $3.43 would yield $0.93/share on the call (vs. $0.93 intrinsic value), while a 5% downside to $3.10 would trigger $0.40/share on the put. High gamma (0.148) ensures rapid delta expansion if PETS breaks above $3.46.
• Hook: If the board signals openness to the bid by mid-2026, PETS20260618C2.5 could outperform as time decay (-0.002/day) becomes favorable.

Backtest Petmed Express Stock Performance
The backtest of PETS ETF after an intraday increase of 84% from 2022 to now reveals mixed results. While the 3-Day, 10-Day, and 30-Day win rates show a moderate level of performance, the overall returns over these periods are negative, with a maximum return of only -0.64% during the backtest period.

Act Now: PETS at Inflection Point – Buyout or Breakout?
The $4 buyout proposal has transformed PETS into a binary event stock: either the board accepts the offer, capping gains at $4, or the market revalues the company higher based on its pet healthcare growth potential. With RSI at 56.8 and MACD near zero, the stock remains in a neutral technical state, but the 671% surge in turnover suggests short-term momentum is intact. Investors should monitor the board’s timeline for due diligence and compare PETS’ progress to sector leader Johnson & Johnson (JNJ), which rose 1.74% today amid broader pharma sector consolidation. For now, the PETS20260618C2.5 call offers a high-leverage play on the buyout narrative, while the 200-day MA at $3.10 acts as a critical support level to watch. Action: Buy the June 2026 $2.50 call if PETS holds above $3.10; exit if it closes below $3.00.