Mindray Medical (MR) Weak Despite CEO Offer on Table

There is no particular news out there on MR, yet the stock is under heavy selling pressure since the opening bell, down 4.4% on 1.4 times daily average share volume less than half way into the trading session, and implied volatility is up sharply by 33%. Open interest in Jan’16 25 puts has been building gradually since June 1 and another 500 bought this morning for $0.85 on wide spreads. On May 11, the company reported Q1 results that missed EPS by 3 cents (10% below consensus view) and missed revenues by $15M (5.2% below consensus view). The stock gapped down sharply after that earnings report, but was rescued on June 4 after the CEO made going private offer $30/ADS. The board is theoretically still reviewing that offer with no final announcement yet but the stock price action is unusually weak, enough to grab our attention.