After posting sharp gains on rumors of an impending takeover, Comprehensive Care Corp.'s stock slid downward in heavy trading Monday to close at $20.38 a share, down $1.75 on volume of 308,500 shares.
Last week, shares of the Newport Beach health care company shot up to $22.13 a share, up $4.63 from $17.50 a share on Dec. 12 when rumors of the takeover by New York-based Avon Products Inc. began to circulate.
Officials of both companies have refused to comment on the acquisition rumors, but Avon reportedly has told analysts privately that while it plans acquisitions in the health care field, it has no plans to acquire CompCare.
Although it was not immediately clear Monday whether the heavy trading volume indicated that investors no longer believe the rumors, Larry Selwitz, a securities analyst who follows CompCare for the investment firm Bateman Eichler, Hill Richards Inc., of Los Angeles, suggested that profit-taking may be behind the drop in price.
"It's the end of the year and people are busy swapping stock. People may just be trying to get their money out," Selwitz said.