Market Commentary

McCaul Sold at the Top As MRK Continues to Slide

Jabran Kundi
6 Feb 2024 · 1 minute read

Michael McCaul is known not only for his frequent trades but also for the size of those trades. In the last 12 months, he has traded over $151 million worth of stock. So when he times an entry or an exit almost perfectly, people notice. One such trade recently came in the health care company Merck and Co Inc. (MRK:US) where McCaul managed to sell near an all-time high.

The shares of MRK have been under pressure lately, despite beating revenue estimates and continuing the dividend. The reason for this is the acquisition of Prometheus: a biotech company based in California. 

The acquisition was finalized at $200 per share, a 75.4% premium to the last closing price before the announcement was made. This caused a $10.8 billion dent in the MRK balance sheet, something that has kept the stock under pressure since the deal was made.

Michael McCaul was shrewd enough to let go of a part of his holding when the stock hit a new all-time high. On 12th May, he sold $115,000 - $300,000 worth of stock at $117.14, just below the $119.65 high that the stock touched around the same time. 

McCaul’s bet has paid off in the short run as the stock continues to slide despite beating its revenue estimates in the earnings announced on the 1st of August. Its last closing price was $106.41, more than 10% below McCaul’s selling price.