Price Forecast:

Bullish Case: Avid Bioservices' acquisition by private equity firms may stabilize its operations, boosting market confidence and driving revenue growth from new partnerships. Increased biopharma demand could further lift CDMO prospects.

Bearish Case: Continued weak financial performance and high valuations may persist, exacerbated by ongoing customer pullbacks and broader market uncertainties, leading to potential further declines in CDMO's stock price.

Potential Outcomes:

• Increased demand leading to a revenue boost (40% probability).
• Weak financials resulting in price declines (55% probability).
• Strategic partnerships enhancing market presence (30% probability).
• Market corrections negatively impacting stock price (50% probability).

Trading Oracle: Implement a bearish strategy with a credit spread using CDMO 12/20/2024 puts, capitalizing on anticipated weaknesses while limiting risk. Shorting volatility through OTM puts aligns with current market conditions, targeting consistent income from high implied volatility.

December 13, 2024