After a trading whirlwind stunned the market over the course of the first four days of the week, investors were content to get an early start on the weekend. Friday’s low-volume effort left the S&P 500 at 1,988.87, up an almost imperceptible 0.06% for the day.
Not every stock managed to just drift sideways today, though. Mylan NV (NASDAQ:MYL), GameStop Corp. (NYSE:GME) and Autodesk, Inc. (NASDAQ:ADSK) all took some lumps. Here’s why.
Autodesk, Inc. (ADSK)
The future of software may be in the cloud, but that’s not to say every software company is making the move with a great deal of success. Case in point: Autodesk, which has been steering its clients to a web-based version of its design software but fiscally suffering as a result.
Last quarter, the company earned 19 cents per share on $609.5 million in revenue. The former topped estimates for a profit of 17 cents per share of ADSK, while the latter fell short of expectations of $612.4 million.
The spark for the 5% selloff from Autodesk shares, however, was likely rooted in the full-year profit outlook. The company now foresees a profit of between 60 cents and 72 cents per share, versus prior guidance for earnings of between 95 cents and $1.10 per share of ADSK.
The company is finding that subscription-based access to the design platform isn’t as lucrative as outright sales of software.
GameStop Corp. (GME)
Video-game retailer GameStop did well enough last quarter, but ended up undercutting its stock with a less-than-thrilling outlook for Q3. Earnings of 31 cents per share last quarter handily topped estimates for earnings of 24 cents per share of GME, while revenue of $1.76 billion exceeded analysts’ outlook for a top line of $1.727 billion. But the company says it only expects to see same-store sales growth between 1% and 4% for the current quarter.
The catalyst for the 8% tumble from GME, however, was a downgrade from Benchmark. The Benchmark analyst dropped the stock from a “hold” to a “sell,” pointing out that the advent of digital alternatives over the course of the next few years will effectively make the company’s core operation obsolete.
Mylan NV (MYL)
Last but certainly not least, just when it looked like the drama surrounding Mylan and Perrigo Company plc (NYSE:PRGO) was fading away, it was stirred up again today. At least this time, though, it looks like a step was actually taken towards some finality to the saga.
In short, MYL shareholders have approved the $35.6 billion hostile takeover of Perrigo.
The acquisition effort was already underway, and still hasn’t technically been made. The majority of Perrigo owners can still reject the offer, which under Irish law means Mylan can’t try to make another tender offer for a year.
Either way, the fact that MYL shares fell more than 2% on the news that the company was moving ahead with the very act shareholders just approved says investors are either concerned about the price being paid, or concerned that the offer will be rejected and that Mylan will be placed on the sidelines for a year … while another suitor could step in.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
