Stocks got the day started on an encouraging foot. They just didn’t finish it that way.
The S&P 500’s close of 2,107.4 was 0.07% lower than Tuesday’s close, with the Greek bailout deal spurring a surprising wave of defections from the struggling country. Janet Yellen also all but confirmed we’d still see at least one interest rate hike this year, in opposition to what most investors think they want.
It was much worse for Yum! Brands, Inc. (NYSE:YUM), Micron Technology, Inc. (NASDAQ:MU) and Twitter Inc. (NYSE:TWTR), though. These three stocks used far more than their fair share of red ink on Wednesday.
Here’s a look at Wednesday’s worst stocks.
Yum! Brands (YUM)
Though the company did better than expected last quarter, investors just couldn’t get past the severity of trouble Yum! Brands is dealing with in China.
The good news: Yum! Brands earned 69 cents per share last quarter on $3.11 billion in sales. The pros were only looking for a profit of 63 cents per share of YUM. Although analysts were calling for a top line of $3.18 billion for the second quarter, they only fell 3% on a year-over-year basis.
The bad news: Last quarter, overall sales in China fell 4% for Yum! Brands, while same-store sales were off 10%. The company continues to struggle with food-safety from several quarters ago, though it may be time to concede that its KFC, Taco Bell and Pizza Hut brands are simply missing the mark with Chinese consumers.
YUM shares fell nearly 3% on the news.
Micron Technology (MU)
The market clearly cheered the idea of an acquisition of Micron Technology yesterday, sending MU shares higher to the tune of 11% on the heels of reports that Chinese technology company Tsinghua Unigroup had made an offer of $21 per share, or a total of $23 billion.
Having had a night to sleep on it, though, MU shareholders are either dissatisfied with the offer, or don’t see it making it past regulatory hurdles, or a combination of both of those impasses.
Whatever the reason, second thoughts sent Micron Technology shares nearly 4% lower on Wednesday.
Twitter (TWTR)
Last but not least, for the second time this year Twitter investors were victims of false takeover rumors, with Tuesday’s hoax being far more dastardly and deliberate than the one from early April.
Although the website has been completely erased from the internet’s landscape, for a brief while yesterday a fake news site called bloomberg.market (in no way related to news site Bloomberg, though made to look as if it was) suggested the microblogging company had been given an acquisition offer. The “news” pushed TWTR shares up as much as 8.5% before settling in to a close of $35.77.
With the rumors clearly debunked in the meantime, TWTR shares were down nearly 3% today.
Twitter isn’t apt to be part of any real buyout discussion anytime soon, either. According to Great Speculations’ Jim Collins, ongoing dilution only makes a bad valuation problem even less attractive to any potential suitors.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
