What happened

Shares of OPKO Health (NASDAQ:OPK) were plunging 18.5% as of 11:58 a.m. EDT on Friday. The company reported its third-quarter earnings results after the market closed on Thursday, and although OPKO beat the average analysts' revenue estimate, its earnings of $0.04 per share narrowly missed the consensus estimate of $0.05.

So what

It might not make sense that OPKO's shares would fall so much on a small earnings miss. That's especially the case when the company's third-quarter revenue of $428.1 million blew away the average analysts' estimate of $376.4 million.

Man looking at red line plunging through floor

Images source: Getty Images.

Probably the best explanation is that there is an enormous amount of skepticism about OPKO, as evidenced by the short percent of float for the healthcare stock at a sky-high 32.7%. When there's that much negativity about a stock, any bad news tends to outweigh the good news.

But OPKO's Q3 performance actually was pretty good overall. The company generated a quarterly profit for the first time in several years. Its diagnostics business is booming amid the coronavirus pandemic. Sales of secondary hyperparathyroidism drug Rayaldee are climbing.

In addition, management doesn't appear to be ruling out the possibility of evaluating strategic alternatives to unlock shareholder value. Activist investor Sian Capital issued a press release Thursday evening pressuring OPKO to consider several options, including a sale to go private.

Now what

Investors should keep a close watch on what direction OPKO takes in response to the proposals by Sian Capital. Developments with the pandemic could also impact the stock. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.