The market got the new week started on an uncertain foot, with most traders mentally on the fence until Wednesday’s rate-hike decision from the Fed. After spending a little time in the black and a lot on the red, the S&P 500 finished the session at 2,021.94, up 0.48%.
It wasn’t a winner for all stocks though, and for owners of Newell Rubbermaid Inc. (NYSE:NWL), GoPro Inc (NASDAQ:GPRO) and Dow Chemical Co (NYSE:DOW), it was especially bad. These three names led the bearish effort. Here’s what investors need to know.
Newell Rubbermaid Inc. (NWL)
Newell Rubbermaid CEO Michael Polk may have felt it was the right time and price for the company to acquire peer and rival Jarden Corp. (NYSE:JAH), but judging from the near-7% tumble NWL shares took today, the market doesn’t agree.
The news was released this morning — consumer goods maker Newell Rubbermaid, which makes everything from baby seats to glue to pans, is buying Jarden for what amounts to be $13.2 billion worth of cash and NWL shares (more shares than cash). The deal is expected to save $500 million over the course of four years, though it should immediately bolster the bottom line.
While $13.2 billion for a company that has driven $8.4 billion in revenue over the past four quarters isn’t a bad deal, NWL shareholders are understandably concerned about such a big, dilutive injection of shares into the float.
Dow Chemical Co (DOW)
Just when it looked like the (mostly bearish) drama surrounding the merger of E I Du Pont De Nemours And Co. (NYSE:DD) — better known as just DuPont — and DOW had passed, the story has taken a surprising twist.
It’s difficult to call it anything but crybabying, knowing the circumstances, but investors still weren’t quite sure how to interpret activist investor Dan Loeb’s comment that current Dow Chemical CEO Andrew Liveris should not only not become the chairman of the soon-to-be-merged companies (as is planned), but should be removed from his present role as CEO.
The merger was allegedly decided and announced before Loeb was allowed to speak about Dow. Loeb wasn’t necessarily against the pairing, but isn’t a fan of how it all materialized. Then again, the jabs look more like the result of a personal beef with Liveris than a professional one. DOW shareholders were rattled all the same though, unsure if the already-struggling stock would face even more pressure after Loeb’s outcry.
DOW shares closed 4% lower on the news.
GoPro Inc (GPRO)
Last but not least, just when it looked like GoPro Inc. might have made a bottom and started on the road to recover, GPRO shares were upended to the tune of 9.6% on Monday following a downgrade from Morgan Stanley.
Analyst James Faucette lowered his opinion on GoPro to an “underweight,” and simultaneously lowered his price target of GPRO from $23 to $12. Faucette explained, “Likelihood that high inventory persists into 2016, slower consumer drone opportunity, and later assumed HERO 5 compels us to cut estimates.”
The downgrade from Morgan Stanley is just one of many seen for GPRO of late, helping to drive the 70% pullback since August.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
