Protara Therapeutics Plummets 20.7%: Equity Offering Sparks Investor Exodus

Summary
• Protara Therapeutics (TARA) slumps 20.69% to $5.45, a 16.01% pre-market drop widening to 20.7% by 6:17 PM ET
• $75M public offering priced at $5.75 per share triggers immediate 16.4% discount in trading
• Intraday range of $5.07–$5.59 reveals $0.52 volatility amid heavy 14.8% turnover

Protara Therapeutics' stock imploded on Friday as a $75 million equity offering priced at $5.75 per share triggered a 20.7% intraday selloff. The offering, announced Thursday, saw shares trade at a 16.4% discount to the offering price within hours. With a 14.8% turnover rate and a 52-week low of $2.77 looming, the biotech's aggressive capital raise has sparked urgent questions about valuation sustainability and investor sentiment.

Equity Offering Triggers Immediate Valuation Correction
The 20.7% intraday plunge in TARA shares directly correlates with Protara's $75 million public offering priced at $5.75 per share. The offering, announced on December 4, created immediate downward pressure as the market priced in a 16.4% discount to the $5.75 offering price. This discount reflects investor skepticism about the $5.75 valuation, particularly given the company's -3.9x dynamic P/E ratio and $213.9M market cap. The offering's 13.04M shares represent a 14.8% turnover rate, amplifying short-term volatility as institutional investors offloaded newly issued shares.

Biotech Sector Volatility Intensifies as AMGN Retreats
The biotech sector experienced heightened volatility as Amgen (AMGN) fell 2.54% on Friday, reflecting broader risk-off sentiment. While Protara's selloff is equity-offering specific, the sector's 2.5% decline underscores investor caution ahead of FDA decisions on gene therapies and GLP-1 drug approvals. AMGN's retreat contrasts with peers like Novo Nordisk and Eli Lilly, which have maintained strong momentum in the obesity drug space.

Bearish Positioning: Leveraged Puts and Short-Term Expiry Plays
• 200-day MA: $3.96 (below current price) • RSI: 66.33 (neutral) • MACD: 0.509 (bullish divergence) • Bollinger Bands: $4.02–$8.35 (wide range)

Technical indicators suggest short-term bearish momentum despite long-term bullish fundamentals. Key support levels at $5.07 (intraday low) and $4.02 (lower Bollinger Band) could trigger further declines. The 14.8% turnover rate and -3.9x P/E ratio indicate valuation pressure. No leveraged ETF data is available for direct correlation.

Top Option 1: TARA20251219P5
• Put Option • Strike: $5 • Expiry: 2025-12-19 • IV: 69.24% • Leverage: 55.30% • Delta: -0.21 • Theta: -0.004 • Gamma: 0.37 • Turnover: $13,908
• High leverage ratio (55.3%) and moderate delta (-0.21) position this put for 5% downside scenarios. The 69.24% IV suggests market anticipation of volatility. Theta decay (-0.004) is manageable for a 12-day expiry.
Payoff Calculation: At 5% downside (5.4486 → 5.1767), payoff = max(0, 5.1767 - 5) = $0.1767 per share. With 55.3% leverage, this represents a 3.19% return on capital.

Top Option 2: TARA20260220P5
• Put Option • Strike: $5 • Expiry: 2026-02-20 • IV: 94.77% • Leverage: 8.51% • Delta: -0.32 • Theta: -0.004 • Gamma: 0.15 • Turnover: $1,300
• 94.77% IV reflects extreme volatility expectations. The -0.32 delta offers directional exposure while 8.51% leverage balances risk. Theta decay (-0.004) is acceptable for a 82-day expiry.
Payoff Calculation: At 5% downside, payoff = $0.1767 per share. With 8.51% leverage, this represents a 2.08% return on capital.

Aggressive bears should prioritize TARA20251219P5 for short-term volatility capture. If the $5.07 support breaks, consider rolling into TARA20260220P5 for extended bearish exposure.

Backtest Protara Therapeutics Stock Performance
Below is a concise event-study summary together with an interactive result panel. Please explore the panel for the full statistics, charts and downloadable data.Key findings • Sample size: 9 plunges ≥ 21 % from the intraday high (2022-01-03 – 2025-12-05). • Entry rule: buy next trading day after the plunge, evaluated for 30-day holding horizon. • Median P/L after 7 trading days ≈ -10 %; win-rate falls from 33 % (1-day) to 0 % (7-day). • The pattern shows persistent under-performance versus benchmark, with the strongest negative excess return around trading days 7-10. • No statistically significant positive drift was detected over the full 30-day window, suggesting “buy-the-dip” has not worked historically for TARA at this drawdown threshold.Assumptions auto-filled 1. Back-test period set to 2022-01-03 (first trading day of 2022) through 2025-12-05 (today) because user asked “from 2022 to now”. 2. Event dates derived where (low-high)/high ≤ -0.21, then shifted by +1 day for entry. 3. Default evaluation window of 30 calendar trading days applied by the engine. 4. Close price series used because intraday lows/highs already captured in event detection.Feel free to let me know if you’d like to change any of these parameters or dig deeper into sub-periods.Open the panel to view detailed cumulative return curves, distribution of event outcomes and the day-by-day statistics table.

Critical Support Levels to Watch as Biotech Sector Reassesses
The immediate priority for TARA is defending the $5.07 intraday low and $4.02 lower Bollinger Band. A breakdown below $5.07 would validate the bearish case, with $4.02 as the next critical level. The biotech sector's 2.5% decline, led by AMGN's 2.54% retreat, suggests broader risk-off sentiment. Investors should monitor the $5.75 offering price as a psychological floor. If $5.07 breaks, TARA20251219P5 offers high-leverage short-term bearish exposure. For longer-term positioning, the 94.77% IV in TARA20260220P5 reflects market anticipation of extended volatility.