Despite consumer confidence ticking higher in December, stocks lost a decent amount of ground in Tuesday’s trading. The S&P 500 peeled back from Monday’s record high to close down 0.5%, at 2080.35.
And some stocks fared much worse. Take Corrections Corp. of America (CXW), SolarCity Corp. (SCTY) and Globalstar, Inc. (GSAT) for instance. Investors found plenty of reason to beat these stocks down more than others. Here’s a look at what traders were thinking.
SolarCity (SCTY)
Just when it looked like SolarCity might finally start to move higher again, the bears jump in and pull the rug out from underneath the stock.
There was no specific prompt for the pullback today, nor any decisive reason for the tumble SCTY stock took. Nevertheless, the rhetoric surrounding SolarCity has been less than kind of late, such as this Forbes call to shed investments in SolarCity and TheStreet.com’s backhanded compliment that the company was finding a way to grow in spite of numerous challenges that should actually be serving as impasses.
Whatever the prompt, when all was said and done, SCTY stock fell a little more than 4% during Tuesday’s trading.
Globalstar (GSAT)
Just when it looks like Globalstar shares are on the mend, it manages to find a pitfall.
Up 72% since its October plunge and knocking on the door of a major break above a technical ceiling at $3.00, GSAT stock fell nearly 6% on Tuesday following an alarming commentary regarding the company’s technology and the radio frequencies that technology utilizes. Wi-fi consulting firm’s Divergent Dynamics’ CEO Devin Akin explained to TheStreet.com’s Adam Gefvert:
“People can use 5 GHz if the 2.4 GHz band is congested but for them to use Channel 14 [the one Globalstar owns], which already has interference on it, doesn’t make sense,” said Akin. “Within five years, using 2.4 GHz for wi-fi connectivity will be unthinkable.”
To be fair, the FCC could still make a ruling that favors the bulk of Globalstar’s licensed frequencies. That’s not the sort of risk most investors prefer to take, however.
Corrections Corp. Of America (CXW)
Last but not least, Corrections Corp. Of America shareholders today learned the hard way that even managing prisons is a business as much as it is a duty. The prison-management outfit was informed by the Federal Bureau of Prisons on Monday evening that its services were no longer needed at its 2016-bed correctional center in Northeast Ohio.
Corrections Corp. Of America didn’t do anything wrong. The facility is simply going to be closed. Nevertheless, the contract was worth about $10 million in quarterly revenue to CCA. For perspective, the prison-management company generated revenue of $1.65 billion over the past four quarters.
CXW stock closed at $36.72 on Tuesday, down nearly 3%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
