Why Adamas Pharmaceuticals Inc. Jumped Higher Today
Adamas Pharmaceuticals (NASDAQ: ADMS) closed up 21% on Monday, after Point72 Asset Management disclosed in an SEC document on Friday after the bell that it boosted its stake in the drugmaker.
The fund now owns 1,144,000 shares of Adamas, and Point72's associated fund, Cubist Systematic Strategies, owns another 1,200, giving Steven Cohen, who runs the management company, a 5.1% control of the Adamas' shares.
It's understandable that investors would want to follow Cohen's trades, considering his smart investments have generally outpaced his not-so-smart ones. But the problem with following a guru based on SEC documents is that investors can't tell when the purchase was made or at what price. It's possible that Point72 bought a majority of the shares before the FDA approved Adamas' Parkinson's disease drug Gocovri in August, and the fund is just waiting to take its profits with no plans to become a long-term shareholder. Ironically, for all we know, today's jump in the stock price because Point72 disclosed that it owns shares could be what pushes Point72 to lighten its stake or sell out altogether. And we wouldn't know that until the group files another SEC document disclosing that it doesn't own shares.
Source: Fool.com
