Stocks didn’t get the new week started on a particularly bullish foot, sinking relatively deep into the red after an initial bullish effort shortly after the open. Though unsaid by most, the pullback in crude prices has been underway so long that some investors are wondering if more significant economic problems are in the cards.
Seattle Genetics, Inc. (SGEN), Continental Resources, Inc. (CLR), and Twitter Inc. (TWTR) were the worst of the worst on Monday, losing far more ground than the market as a whole did mainly because investors just decided they didn’t like them.
Twitter (TWTR)
It wasn’t one piece of specific news that torpedoed Twitter today. Rather, it was the accumulation of a string of bad news over the course of last week that gave the media a reason to kick TWTR stock while it was down on Monday.
The ball started rolling in earnest early last the week when news that Twitter co-founder and largest shareholder Evan Williams finally sold some of his once-tightly-held stake in the company. CEO Dick Costol, as it turns out, recently sold more than half his TWTR stock position.
Already wondering if it’s time to shed shares, investors may have been spooked even further on Friday when former (demoted) Head of Product Daniel Graf left the company. That was collectively enough to prompt guests on this morning’s episode of CNBC stock market television program “Fast Money” to deem Twitter a “show me” stock, meaning investors should wait for the company to prove its value rather than assume the company will grow into its frothy price.
Whatever its value should be, TWTR stock was down nearly 6% on Monday, and is now down 34% from its early October peak of $55.99.
Seattle Genetics (SGEN)
Seattle Genetics once again reminded investors that trading biotech stocks can be a tricky game. SGEN stock stumbled more than 7% on Monday after the company’s attempts to spin drug development news in a positive light. The market clearly didn’t bite.
The focal point of Monday’s plunge from SGEN stock is the company’s ADCETRIS drug, for Hodgkin Lymphoma. The phase 1 trial of ADCETRIS and AVD as a front-line treatment as well as a phase 2 study of the drug also as a first treatment showed encouraging efficacy. However, that still isn’t enough to satisfy investors who are increasingly worried that the Seattle Genetics drug could lose more ground to similar Hodgkin’s lymphoma treatments gaining traction in this particular market.
Continental Resources (CLR)
The continued rout of crude oil prices continues to mean an even bigger rout of oil stocks. Continental Resources was today’s primary target, with CLR stock plunging more than 11% against the backdrop of oil’s 4% selloff. CLR stock is now down a stunning 58% from their August peak, reaching two-year lows today.
Continental Resources is primarily a shale oil name … a group that’s been hit inordinately hard in the wake of the plunge in oil prices from its June peak of more than $100 per barrel to today’s price near $63.40. Though Continental Resources CEO Harold Hamm maintains his company can profitably tolerate oil prices all the way down to $50 per barrel, the recent action from CLR stock says the market isn’t quite as confident.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
