Teetering on the edge of a major meltdown, the bulls were able to put at least a little distance between themselves and the edge of the cliff today, largely on the heels of surging (read “healthier”) oil prices. The S&P 500 ended the session at 1864.78, up 1.95% for the day, though still down 0.8% for the week.
Not every stock joined in the rally effort, though. Activision Blizzard, Inc. (NASDAQ:ATVI), Pandora Media Inc (NYSE:P) and L Brands Inc (NYSE:LB) couldn’t win on Friday. Here’s the deal.
Activision Blizzard, Inc. (ATVI)
To say the fourth quarter was a tough one for video game-maker Activision Blizzard would be an understatement. Q4 was downright terrible for the company, and ATVI shareholders paid the price today in the form of a 7.9% selloff.
Last quarter, Activision Blizzard earned 81 cents per share on revenue of $2.12 billion. Analysts, however, were expecting a bottom line of 83 cents per share of ATVI and a top line of $2.20 billion. Its perennial-rainmaker Call of Duty franchise did its job — again — but weakness from its Guitar Hero and Skylanders iterations did more damage than Call of Duty: Black Ops 3 could offset.
The bulk of the selling on Friday, however, likely stemmed from a lackluster outlook for the current year. The company only projects a profit of $1.75 per share of ATVI in 2016, which is considerably less than the $2.05 analysts had been modeling.
L Brands Inc (LB)
Just when it looked like shares of L Brands — the parent company of Victoria’s Secret and Bath & Body Works — were going to regain some of the 15% loss they suffered in early February after the company warned of weak January sales, the company threw LB shareholders another curveball today… Victoria’s Secret CEO Sharen Turney has resigned.
Turney reported it was a decision reflecting personal priorities, though the abrupt and unexpected resignation — just a few days following news that January’s same-store sales slumped nearly 4% — raises questions.
On the other hand, Turney was a 16-year veteran of Victoria’s Secret, and in 2016 helped lead the company to a record level of revenue. Aside from the sheer disruption such a transition can bring, Turney will be missed as a proven leader who can grow business.
LB shares ended the day down 2.4%.
Pandora Media Inc. (P)
Last, but certainly not least, online music outlet Pandora Media saw its stock plunge 12% on Friday, superficially driven lower by a poor fourth-quarter report, but philosophically driven lower because management all but admitted it doesn’t see the company becoming a viable business on its own.
Last quarter, Pandora swung to a loss of 7 cents per share, versus a profit of 6 cents per share in the same quarter a year earlier. Revenue rolled in at $336.2 million. That top line was better than the anticipated $333 million, but analysts were collectively looking for a loss of only 6 cents per share of P stock.
The bulk of the damage Pandora Media shares suffered today, however, was in response to reports that it was considering putting itself up for sale. No potential buyers were named, nor was the rumor confirmed by the company. But, if it is true, it’s unlikely a would-be buyer is going to pay a good price for P shares simply because it wouldn’t have to.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
