NEW YORK CITY, New York: Hims & Hers sent ripples through the pharmaceutical world by unveiling a weight-loss pill priced at just US$49 a month, but the headline-grabbing move failed to lift its battered stock.

Shares of the telehealth and compounding company jumped sharply at the open before reversing course to end the day down four percent, extending a slump that has erased about 60 percent of its market value since mid-October. The reaction underscored a familiar pattern for Hims investors: bold announcements that briefly excite the market, followed by renewed selling pressure.

Hims said it would offer a discounted compounded version of Novo Nordisk's Wegovy, entering a fiercely competitive obesity drug market where Novo has already been losing momentum to rival treatments from Eli Lilly. Initial enthusiasm faded quickly after Novo threatened legal action over the plan.

"Wall Street's reaction is often based on perception, and the (initial) perception is, $49 is a lot cheaper than what they can get elsewhere," said Rajiv Leventhal, senior analyst for digital health at eMarketer.

He noted, however, that the $49 price applies only to the first month. Customers who opt for a five-month plan would pay $99 per month thereafter, narrowing the apparent gap with other offerings.

The stock surged as much as 14 percent early in the session but slid into negative territory by the close. It dropped another four percent in after-hours trading after U.S. Food and Drug Administration head Marty Makary said on X that the agency would take "swift action against companies mass-marketing illegal copycat drugs, claiming they are similar to FDA-approved products." Makary did not name any companies or products.

Hims shares have long been marked by sharp swings. Over the past two years, the stock has nearly tripled, a gain punctuated by dramatic reversals, including a 170 percent rally in January 2025 followed by a 63 percent selloff, and then another 145 percent surge.

The session on February 5 was the busiest for the stock since October, with about 69 million shares changing hands.

"It is a bit disappointing that the stock really couldn't rally on good news; that's usually not a good sign," said Steve Sosnick, chief strategist at Interactive Brokers in Greenwich, Connecticut.

The volatility has made Hims a popular target for short sellers. While large institutions such as BlackRock, Vanguard, and JPMorgan Asset Management rank among its largest shareholders, nearly one-third of Hims' shares have been lent out for short positions, according to LSEG data. By comparison, less than one percent of Eli Lilly's shares are borrowed for short bets.

"This stock has gotten hammered, it's done nothing but go down," said Paul Cerro, founder and chief investment officer at hedge fund Cedar Grove Capital, who previously held a short position in the stock but no longer does.

Cerro said trading volumes have thinned since summer, making a high-volume day like Thursday an opportunity for investors looking to exit. "The longs found the liquidity to get out of that position," he said.

Options markets suggest traders are bracing for more turbulence. The stock's 30-day implied volatility climbed to a three-month high on February 5, and pricing points to a possible 20 percent move in either direction by next week's close — potentially the most significant weekly swing since June.

To Sosnick, the muted response to the February 5 announcement signals a broader shift in sentiment.

"It was a big favorite of momentum traders on the way up, and like so many of these stocks, it's much less popular on the way down," he said.