Ionis Pharmaceuticals ($IONS) received full FDA approval for its rare brain disorder drug Zanvastro on Friday, and the market rewarded shareholders with a 10.05% haircut.
Every retail forum spent the weekend screaming about market manipulation. Nobody opened a backtester.
In our database of 7,993 catalyst-driven gap-downs of 10% or more, the stock closes green only 46% of the time. The short side wins 52% of the time with a negative intraday mean return of -0.84%.
When a stock drops on landmark positive news, institutional liquidity is exiting, not misunderstanding the science. Respect the base rate before you volunteer to catch the falling blade at Monday's open.