Shares in Polypore International (Ticker: PPO) dropped as much as 12% to the lowest level since September of 2012 on Friday on heavy volume, with more shares changing hands during the first 90 minutes of the session than the stock’s daily recorded volume going back to November of last year.
Polypore shares opened sharply lower this morning after the company yesterday announced Celgard, LLC, a subsidiary of Polypore International, Inc., filed a complaint in the U.S. District Court of the Western District of North Carolina against customer LG. The stock is currently down nearly 9.0% at $32.94 as of 11:15 a.m. EST.
Options changing hands on Polypore in the early going suggest some traders are positioning for the price of the underlying to extend losses ahead of the company’s fourth-quarter and full year 2013 earnings report scheduled for release after the close of trading on February 24th. The most traded contracts by volume thus far in the session are the Feb $32.5 strike puts, with around 1,000 lots in play against open interest of 206 contracts. Time and sales data suggests most of the puts were purchased at a premium of $1.30 each. The bearish position may be profitable at expiration in the event that PPO shares decline 5.0% from the current level of $32.94 to trade below the breakeven price of $31.20.
Chart – Polypore shares down more than 30% since reaching 52-week high of $48.41 in Aug. ‘13
