Between the day’s bullish start followed swiftly by a steady march into the red by mid-day and a slow, grinding rebound effort, Thursday was a question mark right up until the closing bell rang. When all was said and done, though, the session ended in stalemate — the S&P 500’s close of 1989.57 was up a minuscule 0.02%.
A stalemate would have been palatable for owners of Twitter Inc (NYSE:TWTR), Yahoo! Inc. (NASDAQ:YHOO) and Energy Transfer Equity LP (NYSE:ETE), however, as each logged sizeable losses on Thursday. Here’s what went wrong for each.
Twitter Inc (TWTR)
For the second day in a row, and for largely the same reason, Twitter shares earned a spot on the daily “Worst 3” list.
Wednesday’s 4% tumble from TWTR was largely spurred by research from Sanford C. Bernstein suggesting the company’s stock-based compensation plan is a “relatively underappreciated operating expense” that was ultimately “uniquely treacherous.”
Thursday, almost as if in defiance of the Bernstein commentary, the company began dishing out unscheduled cash and stock bonuses in an effort to prevent any more employee exits. The cash portion of these select bonuses ranged from $50,000 to $200,000 — depending on the employee’s length of service — were awarded to workers who promised to stay with the company for at least a few more months.
Investors interpreted as another sign that the ship is sinking faster now, and the crew is getting increasingly desperate.
TWTR ended Thursday down nearly 6%.
Yahoo! Inc. (YHOO)
At another time and in another situation, the addition of two new members to the Yahoo! board of directors would have gone unnoticed, or maybe even treated as a bullish event. With the Internet giant fighting for its life, though, the addition of two new board members was seen as a way for the “old regime” to protect their positions at the ultimate expense of YHOO shareholders.
The two new directors are Catherine Friedman, former Morgan Stanley managing director, and Eric Brandt, former Broadcom CFO. Both are knowledgeable business people, but the timing of the additions — right before a critical meeting with major YHOO shareholder Starboard Value — is suspicious in that a proxy battle is almost inevitable at this point. Which hints that change may not happen soon enough.
SunTrust analyst Robert Peck opined:
“The board is now comprised of seven independent directors (out of nine total) and it is unclear that Starboard would be willing to take anything less than five seats for control of the board. Why these directors would want to join ahead of a potential messy proxy battle has us a little perplexed.”
YHOO closed 2% lower today.
Energy Transfer Equity LP (ETE)
Last but not least, Energy Transfer Equity wasn’t the only oil MLP to dip deep into the red ink on Thursday, but it did lead the bearish charge with a 5% plunge.
For a change, it wasn’t plunging crude oil prices that sent ETE lower. It was (once again) drama surrounding its intended union with Williams Companies Inc (NYSE:WMB). Long story made short, Energy Transfer Equity sold convertible ETE shares to some existing shareholders to facilitate its purchase of Williams Companies. Many shareholders already see the deal as an ill-advised one, and this deal puts them at a disadvantage.
It wasn’t a walk in the park for Williams Companies shareholders Thursday either, who are on the other end of the lose-lose deal. WMB stock lost 11% of its value on Thursday.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
