Ionis Pharmaceuticals ($IONS) announced FDA approval for Zanvastro on Friday, and the tape promptly delivered a 10.05% drop.
The press release reads like a corporate triumph. The tape reads like institutional distribution into retail liquidity.
In our database of 7,993 catalyst-driven gap-downs of 10% or worse, the stock closes lower 53% of the time, generating a median intraday return of -0.75%. Long-side dip buyers win in only 46% of instances.
Retail buys the headline because the drug passed. The base rate says a heavy gap down on confirmed news is an exit, not a gift.