VIVUS Options Now Predicting Much Higher Values, Yet Again (VVUS)

VIVUS, Inc. (NASDAQ: VVUS) is on fire again.  It was just on Friday that we said that stock options pricing was indicating a $24 breakeven price in April and $28 in June.  Amazingly after a huge move already, VIVUS is up double-digit percentages again and shares are north of $24.00 already.

Now we are seeing elevated CALL options trading in the MARCH 2012 CALLS with the strike prices of $20, $21, $22, $23, $24, and $25… also in the $28 and $30 strike call options.

Go out to April and the new options volume spike is in the contracts that with $30 strike price in April with a last price of over $2.00.  For those options to break even on an intrinsic value the stock would have to rise above $32.00.

We are now seeing elevated options in the very speculative out-of-the-money CALLS in the $30, $32, and $35 strike prices in the June expiration.  The closest June strike of $25 at $5.00 implies that by the third Friday in June the stock would have to go to $30.00 before there is intrinsic value in those contracts.

We cannot stress enough that this company will likely raise capital.  At this point, it owes it to itself.  Shares are now up over 12% at $24.90 on more than 20 million shares.

JON C. OGG