On July 3 we wrote about Sonus Networks (NASDAQ:SONS) seeing a big buyer come in and snap up over 2500 JAN $5 calls. In a not so shocking coincidence, this morning, analysts at Pacific Crest initiated coverage of Sonus Networks (SONS), with an outperform rating. Pacific Crest also set a target price of $6.00.
Sure it is just a coincidence that someone bought that pile of $5 calls on Thursday, and then the next business day, Pacific Crest announces this new coverage with a price target with a large premium to the current price around $4.00. Of course we would never assume or imply that someone with ties to Pacific Crest would be involved in this unusual call buying.
The initiation was announced pre market. As the market opens SONS is trading up just 14 cents or over 3% in very early trading. The overall market is down considerably.
Either way, this $6 price target by Pacific Crest will surely be beneficial to the big call buyer from Thursday. The investor has plenty of time for the stock to hit that target, though they’ll likely sell into strength much sooner than that. They may have to wait for the markets to settle back down from it’s post holiday funk.
Here’s the chart on Sonus Networks (SONS)