With the Greece debt-debacle seemingly over following a deal that pieced other this weekend, U.S. stocks soared to their highest values this month. The S&P 500’s close of 2,099.60 was 1.11% better than Friday’s closing value.
It wasn’t a bullish day across the board, though. Horizon Pharma PLC (NASDAQ:HZNP), Ascena Retail Group Inc. (NASDAQ:ASNA) and Corning Incorporated (NYSE:GLW) all lost ground to start the week.
Horizon Pharma (HZNP)
Horizon Pharma was already going to have a tough time taking over Depomed Inc. (NASDAQ:DEPO) with what many observers considered to be a lowball offer of $2.1 billion, or $29.25 per share of DEPO.
But HZNP offered DEPO shareholders an offer they couldn’t take seriously, and the target company went the other direction with things. Depomed swallowed a poison pill that will make it unfruitful for Horizon Pharma (or any other suitor) to acquire the rival pharma company.
What exactly did DEPO do? The company is preparing to issue one right (the right to purchase a share) for each currently-outstanding share of DEPO. Although the maneuver doesn’t preclude Horizon Pharma from a hostile takeover of Depomed, it will cause significant dilution to a buyer that isn’t welcomed by the board of directors.
The news sent HZNP shares lower by almost 3% today.
Ascena Retail Group (ASNA)
Ascena Retail Group — which owns retail store chains Lane Bryant, Cacique, DressBarn, and soon, Ann’s — saw its shares plunge a hefty 13% on Monday after the company lowered its profit guidance for the full year. Now the company believes it will earn something between 57 and 60 cents per share of ASNA in 2015, versus existing analyst estimates of 70 cents per share.
Ascena Retail Group CEO David Jaffe explained quite plainly:
“While we expected a challenging quarter at Justice due to the sell-down of Spring/Summer merchandise coupled with a significant reduction in promotional activity, our revised fourth-quarter expectation incorporates a more complete exit from the existing season’s merchandise mix. We did not see Dressbarn sales rebound as expected coming out of the third quarter, and are disappointed with the performance of our tops assortment, specifically at higher price points.”
Corning (GLW)
High-end flat panel TV demand isn’t what it was supposed to be at this point in time, and the IT market isn’t exactly firing on all cylinders either.
The was the opinion analysts at Bank of America/Merrill Lynch voiced today, anyway, when they downgraded shares of Corning from a neutral stance to “underperform.” The analyst note regarding GLW specifically said:
“We are downgrading shares of Corning to an out of consensus Underperform rating based on our view that street estimates are too high and overly bullish on fundamentals of TVs and IT, which are tracking much worse than consensus expectations.”
BofA/Merrill also lowered its target price on Corning shares from $25 to $16, sending GLW shares down 0.7% to a close near $19 apiece.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
