Why Halliburton Company, Dreamworks Animation Skg Inc., and China Eastern Airlines Corp. Ltd. Are 3 of Today’s Worst Stocks

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The U.S. market just logged a fifth day of essentially no net movement, with a whole new batch of good as well as bad data being doled out on Monday to keep investors confused.

Why Halliburton Company, Dreamworks Animation Skg Inc., and China Eastern Airlines Corp. Ltd. Are 3 of Today's Worst StocksOne dose of bad news was the announcement that Japan has technically entered a recession. On the flipside, Actavis plc (ACT) proved that M&A bidding wars are still alive and kicking, swiping Allergan (AGN) by simply outbidding Valeant Pharmaceuticals (VRX) for the Botox maker.

Some stocks, however, ended up on the wrong end of the M&A spectrum. They ended up accounting for a significant portion of today’s biggest losers too, the most troubled of which were China Eastern Airlines Corp. Ltd. (CEA), Dreamworks Animation Skg Inc. (DWA), and Halliburton Company (HAL).

Dreamworks Animation (DWA)

Dreamworks Animation isn’t going to be acquired by Hasbro (HAS) after all.

The popular animated film studio’s shares jumped sharply on Thursday when rumors surfaced — again — that Dreamworks Animation had found a willing suitor. This time it was toy company Hasbro.

However, as was the case in September when SoftBank was rumored to acquire DWA, however, Hasbro backed away from the potential team-up before ever really stepping up to the bargaining table. DWA stock took a 14% hit following Monday’s news, sending shares right back to where they were on Wednesday before the Hasbro acquisition chatter materialized.

Halliburton Company (HAL)

The offer was reportedly accepted this morning — Halliburton Company will pay $35 billion to purchase oil services outfit Baker Hughes. The price translates to roughly $78.62 per share of BHI stock.

While Halliburton can make good use of Baker Hughes by bringing it all the way into the fold, judging from the 11% selloff Halliburton shares on Monday, most owners of HAL stock don’t seem particularly thrilled with the terms of the deal. Aside from the decision to buy Baker Hughes at a 31% premium to Friday’s closing price, should the union not win the blessing of the Department of Justice’s antitrust hawks, Halliburton Company will still owe Baker Hughes a $3.5 billion fee just for agreeing to try to pair-up.

China Eastern Airlines (CEA)

At first glance, it might be easy to conclude China Eastern Airlines fell 11% on Monday because Goldman Sachs downgraded CEA stock from a conviction-buy to neutral. And to be fair, the selloff was likely related to the downgrade. But there may be another factor in play.

It’s nothing more than a possibility to consider at this point, but China Eastern Airlines and a whole slew of other Chinese stocks may have fallen sharply today as today was the first day the Chinese stock market was directly accessible to foreign investors. Given how so many popular Chinese stocks got hit hard, one can’t help but wonder of traders were simply exchanging their Chinese ADRs like CEA stock for the real thing.

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As of this writing, James Brumley did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2014/11/halliburton-company-dreamworks-animation-skg-inc-china-eastern-airlines-corp-ltd-3-todays-worst-stocks/.

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