With little news to detract them, optimistic bulls shrugged off Wednesday’s weakness and hammered out a modest gain on Thursday. When all was said and done, the S&P 500‘s close at 1952.29 was 0.53% better than Wednesday’s closing level.
Not every stock was carried higher by the bullish tide, however. Dollar Tree, Inc. (NASDAQ:DLTR), Paypal Holdings Inc (NASDAQ:PYPL) and Mobileye NV (NYSE:MBLY) all made their way into negative territory anyway, though for understandable reasons.
Mobileye NV (MBLY)
For the second day in a row, Mobileye shares are down sharply, mostly spurred by notorious short-seller Andrew Left, who touted the stock’s shortcomings at his website, Citron Research.
Left’s case against MBLY was simple enough. He noted:
“There is NOTHING in the past or present financials, business performance or realistic future technology prospects of Mobileye that would get it within miles of justifying its current $12 billion market cap. … Investing in this company is a losing bet on a blue-sky future that just does not exist.”
Andrew Left is famous for (for lack of a better explanation) being famous. He’s made a semi-well-reasoned case against Ambarella Inc (NASDAQ:AMBA), but many of his dozens of bearish calls in the not-so-recent past have indeed panned out.
Regardless of Citron Research’s track record, Left has enough of a voice and enough clout to inspire the very bearishness he says is due for his targeted stocks. The report is the crux of what drove MBLY 7.8% lower on Thursday after sending the stock down a hefty 9.1% on Wednesday.
Paypal Holdings Inc (PYPL)
Don’t look for a company-specific reason Paypal Holdings was one of today’s major names leading the losers; you won’t find one. Rather, to understand what sent PYPL nearly 3% lower on Thursday, your best bet is to look at the news from Google Inc. (NASDAQ:GOOGL, NASDAQ:GOOG).
That news? Google is relaunching an improved version of Google Wallet. Though Android Pay isn’t “new” in the sense that nobody saw it coming (Google unveiled it in May), the NFC digital wallet didn’t become available until today.
It remains to be seen to what extent Android Pay will serve as competition to PayPal, but given the sizable loss PYPL logged on an otherwise bullish day, clearly the market has concerns.
Dollar Tree, Inc. (DLTR)
For the second time in less than two weeks, Dollar Tree shares have earned a spot on the daily “Worst Stocks” list. Though the superficial reasons for placement on the dubious list were different, in an overarching way, the prompt was one and the same — things aren’t going particularly well for DLTR now that the acquisition of Family Dollar is a done deal.
The first appearance for DLTR on the naughty list was Sept. 1, when the company posted surprisingly disappointing second quarter numbers.
Though seemingly a fading memory, as it turns out, Credit Suisse wasn’t quite ready to let it go. Credit Suisse’s Edward Kelly downgraded DLTR from a ‘neutral” rating to an “underperform,” saying:
“Family Dollar deal off to a disappointing start. While management remains positive on the Family Dollar acquisition overall, it’s clear to us the transaction is not living up to initial expectations. … The company’s emphasis on the need for near-term investment in the business in areas like payroll suggests that Family Dollar’s earnings may actually need to rebase temporarily before the company can rebuild profitability; an issue not initially contemplated by most investors.”
DLTR shares closed 2.8% lower on Thursday, and are off to the tune of 12% month-to-date.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
