Given how abruptly Wednesday’s rally stalled on Thursday, Friday’s marketwide stumble can’t come as a surprise. Despite an uptick in June’s consumer confidence level and a hint that inflation is perking back up to healthy levels, the S&P 500 closed 0.7% lower today, at 2094.11.
The selling was largely led by names like Box Inc (NYSE:BOX), Eli Lilly and Co (NYSE:LLY) and Kinder Morgan Inc (NYSE:KMI). Here’s a closer look at what went wrong for each today.
Kinder Morgan Inc (KMI)
With just a quick thought, it would be easy to assume that oil and gas pipeline company Kinder Morgan lost ground today because the price of crude oil did the same. KMI was off more than 2% in the shadow of a 1.3% decline in crude prices.
That wasn’t the key driver behind today’s drop from KMI shares.
In short, the bears crawled out of the woodwork yesterday evening, and tore into Kinder Morgan with extreme prejudice. Specifically, Valuentum Securities’ Brian Nelson cited five (alarmingly cogent) specific reasons he believes Kinder Morgan shares will collapse, while Barron’s John Kimelman chimed in Friday morning, bolstering Nelson’s bearish case.
KMI never had a chance on Friday.
Box Inc (BOX)
For proof that recent initial public offerings are not only volatile but also unpredictable, look no further than Box Inc. Shares of the cloud-based web-content collaboration service provider were down more than 5% on Friday after gaining nearly 3% on Thursday (and they had been up as much as 15% yesterday).
Thursday’s bullish swing was driven by the company’s r for in its first quarter of the year. Box Inc. only lost 28 cents per share on $66 million in revenue, versus analyst expectations for a loss of 31 cents per share of BOX on $66 million in sales.
Apparently with a chance to sleep on the reality of the situation, however, BOX shareholders woke up Friday morning fully recognizing the company is not only not profitable, but won’t be for a long while. Barron’s columnist Tiernan Ray may have planted that seed Thursday afternoon.
Eli Lilly and Co (LLY)
Things were going quite well for Eli Lilly shareholders … until today. Up nearly 18% in one month as of Thursday’s close, the near-3% dip LLY dished on Friday broke the hot streak in a decisive manner.
What was behind the big rally, and perhaps more important, what quelled it so abruptly?
The rally was largely laid on a foundation of expected good news regarding its Alzheimer’s treatment solanezumab, which is due a complete public update next month, but will be discussed on Monday at a key industry conference.
The ascent from LLY was stopped dead in its tracks today, though, after Leerink Partners analyst Seamus Fernandez pointed out how the drug still has more than a year to go before Eli Lilly can ask the FDA to approve … if the company bothers asking. Fernandez also reminded investors that solanezumab has had something of a shaky past.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
