Although the Christmas-break trading lull is over, it segued right into the New Year’s Day lull. Monday’s trading volume was notably thin, with not enough “umph” from either side of the table to move the needle much for any of the major indices despite oil’s dip to new five-year lows.
It wasn’t a tepid session for every stock, though. GoPro Inc. (GPRO), Palo Alto Networks Inc. (PANW) and Arista Networks Inc. (ANET) found themselves under an inordinate amount of selling pressure on Monday, logging some of the day’s biggest losses. Here’s why.
GoPro (GPRO)
After a brief reprieve from the pullback GoPro had been doling out since early October, the sellers went back to work again, sending GPRO stock down more than 6% on Monday.
The December 23 end of a lockup period for a major swath of GPRO stock wasn’t exactly a veiled secret. Still, fearing the impending introduction of 15 million new free-trading shares could end up putting downward pressure on the stock, the market preemptively shed their shares, sending GPRO stock down 41% since its October peak and December 19th. That’s when shares started to perk up again, shortly before the end of the lockup.
Although last week’s gains from GoPro were a distant hint that the worst may be over, today’s weakness from GPRO stock is a clue that all may not be well after all.
News that Google searches for GoPro started to slump during the holiday shopping period may have gotten the blame for the tumble, but the selling was apt to materialize whether Google searches had weakened or not.
Arista Networks (ANET)
As if Arista Networks shareholders hadn’t been through enough already, today’s near-6% dip from ANET stock has brought the three-month pullback to a whopping loss of 34% … with no end in sight.
ANET stock didn’t take on any specific news; there was none today. Rather, this ongoing weakness is largely the result of a legal battle with bigger rival Cisco (CSCO). Several ex-Cisco employees hold top management and design positions at Arista Networks, and Cisco is claiming the networking startup unlawfully employed Cisco-patented technologies in its hardware.
In the meantime, while Cisco is waiting on the court system regarding its patents, the company has also asked the Unites States International Trade Commission –– which operates separately from, and faster than, the judicial system — to ban Arista from selling its wares in the United States.
Wary and worried, owners of ANET stock are deciding being a shareholder isn’t worth the risk and headache.
Palo Alto Networks (PANW)
For proof that’s there can betoo much of a good thing, investors only have to look at the recent action from Palo Alto Networks shares.
As of the end of last week, PANW stock had rallied 120% in 2014 on the heels of several cybersecurity failures underscoring the need for services like the ones offered by Palo Alto Networks. The recent hack of Sony Pictures proved to be yet-another prod for cybersecurity stocks, including PANW stock, which hit a record high of $128.20 last week.
The profit-taking allure just proved to be too much today, though, with PANW stock falling more than 3%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
