It was touch-and-go for stocks all day long on Monday, though when push came to shove by the end of the session, the bulls were in charge. The S&P 500‘s close of 1966.97 was 0.46% higher than Friday’s closing level.
It wasn’t a bullish day for all stocks, though. Merck & Co., Inc. (NYSE:MRK), Alibaba Group Holding Ltd (NYSE:BABA) and BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) all used more than their fair share of red ink on the first day of the new trading week.
Here’s the deal.
BioMarin Pharmaceutical Inc. (BMRN)
Just for the record, BioMarin Pharmaceutical was hardly the only biotechnology name deep in the red today, and the company did nothing specifically to merit the selloff off BMRN shares. But, it was the hardest-hit stock among the major biotech names, dishing out the most pain to the biggest number of shareholders.
The prod for the pullback from BMRN? A tweet from Democratic presidential hopeful Hillary Clinton. She wrote, “Price gouging like this in the specialty drug market is outrageous. Tomorrow I’ll lay out a plan to take it on.”
It took the market only a matter of seconds to tear into the stock of the companies she’d be most likely taking aim at. At the top of the list was BioMarin Pharmaceutical, which explicitly has a portfolio and pipeline of drugs only aimed at rare diseases that require specialized medicines.
BMRN shares closed 6.55% lower for the session.
Merck & Co., Inc. (MRK)
Although Merck shares likely at least partially got caught up in the post-Clinton-tweet selloff, the bulk of the 2%-plus pullback from MRK today was the result of a downgrade from BMO Capital Markets. While BMO is maintaining its “outperform” rating on Merck, it still lowered its price target on MRK from $70 to $66 per share.
Despite the lower price target, BMO Capital Markets still believes the company’s hepatitis C programs are collectively undervalued.
Alibaba Group Holding Ltd (BABA)
Last but not least, just when it looks like things can’t get any worse for Alibaba Group Holding and its shareholders, something new comes along to upend BABA shares.
The latest round of news to create a headwind for BABA? The fact that as of today, a huge swath of shares finally saw their post-IPO lockup restriction expire, meaning those shares could flood the market, increase the supply and crimp the stock’s price as a result.
It was enough to send the stock down nearly 3% on Monday.
The number of shares that became free-trading Alibaba Group Holding shares today equaled about 63% of the total number issued and outstanding … a massive number. Although many of the company’s biggest shareholders and insiders vowed to hold onto their stake in Alibaba, even a small fraction of the 1.6 billion shares of BABA that are newly unrestricted could prove to be overwhelming to the current float in the midst of what’s become a persistent downtrend.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
