With some more time to think about what Thursday’s interest rate decision from the Fed really meant, investors decided today they didn’t like the fact that Janet Yellen & Co. don’t feel like they can take the economy’s training wheels off yet. Ergo, the S&P 500 lost a hefty 1.6% on Friday, finishing the day and the week at 1958.08.
It could have been worse, though, and for shareholders of La Quinta Holdings Inc (NYSE:LQ), Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) and Freeport-McMoRan Inc (NYSE:FCX), it was worse. Here’s why.
Freeport-McMoRan Inc (FCX)
Though the financial struggle that copper and mineral miner Freeport-McMoRan is going through is anything but a secret, FCX investors seemed to be genuinely surprised by news aimed at shoring up the company’s money woes, judging from the stock’s big plunge on Friday.
The news: Freeport-McMoRan announced today that it was aiming to raise $1 billion this week via the sale of FCX stock. The exact number of shares can’t be determined yet — it’s only going to be able to sell them at or near market prices when and if it sells those shares (and it’s relatively certain the company will pull that trigger).
It’s the second such share-based fundraiser Freeport-McMoRan has taken on in as many months. Last month, it sold 96.7 million shares of FCX to raise $1 billion.
Dilution-weary shareholders sent FCX lower by 10% today on the heels of the news.
La Quinta Holdings Inc (LQ)
Owners of La Quinta Holdings were on the receiving end of not one but two (likely related) doses of bad news on Friday, which sent LQ shares down a stunning 15%.
First, the hotel company lowered its full-year EBITDA guidance from a range of between $398 million and $404 million to a range of between $393 million and $400 million.
The bulk of the sharp setback LQ shares suffered on Friday, however, stemmed from the fact that CEO Wayne Goldberg was stepping down immediately. His exit seemed amicable, though the true cause was unclear. Either way, given Goldberg’s history of success at the helm, his absence is largely viewed as a negative.
Vertex Pharmaceuticals Incorporated (VRTX)
Last but not least, Vertex Pharmaceuticals was also a victim of a double dose of bad news and closed out the week with an 8% pullback.
The first blow was struck by new that Galapagos NV (NASDAQ:GLPG) — which is working on a cystic fibrosis drug that could become a potent competitor to VRTX’s offerings — presented some encouraging data for the drug in question at a key biotech conference today.
The second — and bigger — blow to the value of VRTX on Friday, however, came when Piper Jaffray concluded Vertex Pharmaceuticals wasn’t a likely acquisition candidate of Gilead Sciences, Inc. (NASDAQ:GILD). Not that Gilead had made any official (or unofficial) overtures to Vertex, but with that possibility in the back of investors’ minds, Jaffray’s call suggesting it wasn’t likely pulled the rug out from underneath VRTX.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
