Blatant Manipulation of Gilead Continues

Disclaimer: This post does not constitute financial advice. Author has a long position in Gilead. Do your own due diligence before making an investment.

Today’s manipulation of Gilead’s stock price was probably the most blatant I’ve ever seen.

(Close tie: October 22nd 2020, the day remdesivir was given full FDA approval and 30 million shares traded hands but the stock closed flat.)

Here’s what $SPY did today.

Here’s what $QQQ did.

Here’s what $IBB did.

Here’s what $GILD did.

Look what they did to Gilead in the last 10 minutes.

Guys, this is insane. Sure, in one trading session, anything can happen. But this disconnect has been going on for years. Gilead cannot be trading this low while the underlying indexes are at record highs.

Gilead is 80% owned by institutions that rarely sell.

This is blatant manipulation by banks and hedge funds. Even in the face of all the negative press from GameStop, they just keep shorting. True, Gilead is a lot easier to short because institutions are glad to lend out their shares in the short term, but it’s still messed up.

Society does not need people that do this. Hedge funds that destroy the share price of good companies should be shut down. These funds do not create value for society, they transfer it to the mega rich.

Gilead is the number two holding in $IBB.

Here is a five-year chart of $IBB.

Here is a five-year chart of $GILD.

Ridiculous.

In a vacuum, stocks trend upwards over time. Partly due to inflation, partly due to the creation of value. Good news makes stocks go up, and bad news makes them go down.

But not Gilead. Good news has no effect. Bad news has a terrible effect.

It’s almost as if this stock is being abused solely for the purpose of making sure options expire worthless.

There would be a lot of money in it. Funds holding Gilead could turn a 4% yield into 20% just by selling out-of-the-money calls, and then shorting the stock so they don’t trigger.

That might be what’s going. Or maybe it’s a merger. It’s impossible to know what they’re thinking, but it’s extremely obvious that Gilead is being manipulated.

Just look at the message boards.

This week, hedge fund trolls are posting that you shouldn’t buy Gilead because the earnings will be bad and then the stock will drop.

Except that the earnings were guided upwards by Gilead themselves.

It’s basically impossible that they come out on Thursday and saying, “Woops, we miscalculated.” They would be in deep trouble with financial regulators.

What management said at JPM was that their 2021 capital allocation strategy was to increase the dividend, buy back shares, pay down debt, and expand the pipeline.

They literally checked every box you want to hear.

I’m going to hedge my long position with Feb 5th puts, but not because I’m worried about earnings. I’m worried that Wall Street will use whatever Gilead says on Thursday as an excuse to butcher the stock again.

Don’t let hedge fund parasites steal your shares. Good luck.