Though it’s still not etched in stone, if this morning’s headlines are on target, then the European Central Bank is finally going to do something to jump-start the continent’s economy.
The Wall Street Journal reported early on Wednesday that the ECB’s executive board has proposed 50 billion euros’ worth of bond-buybacks per month for at least a 12-month stretch, which should create a simulative effect. U.S. investors, excited about the ripple effect of the maneuver, filed into U.S. stocks on the heels of the news, pushing the S&P 500 higher by 0.5%.
It wasn’t sunshine and roses for every equity, however. Among the worst of Wednesday’s losers were Intrexon Corp. (XON), LendingClub Corporation (LC) and CA Technologies, Inc. (CA). Keep reading for the reason these three stocks tanked.
LendingClub (LC)
Not that there’s any sort of legal requirement the underwriting investment banks of LendingClub be bullish on the company they helped take public just a month and a half earlier, but one could have expected at least a little more enthusiasm when new opinions were posted on Tuesday afternoon. Citigroup, Stifel Nicolaus, Morgan Stanley and Goldman Sachs –– each of which was more than happy to promote LC stock around the time of the IPO — are all merely neutral on LendingClub. It may as well have been an outright sell rating, given the near 9% plunge from LC stock after the lackluster ratings.
Intrexon (XON)
Given the circumstances, we can’t be entirely surprised that Intrexon shares fell more than 12% today after Tuesday’s 5% slide. It was after the close on Tuesday, after all, that the company announced it would be issuing $150 million worth of XON stock via a public offering. Although the money raised would be used to fund the company’s growth, anything that could dilute the existing float can’t be a big hit for current shareholders.
But it’s not like XON stock was in a good, defensive position headed into the announcement. Shares of Intrexon had rallied more than 125% between October’s lows and last week’s high, already leaving profit-takers with itchy trigger fingers. News of the secondary offering was just the catalyst.
CA Technologies (CA)
Last but not least, shares of business software company CA Technologies fell more than 5% on Wednesday following disappointing Q3 results and an equally disappointing full-year outlook.
For the third quarter, CA Technologies saw sales slump by 3.5%, falling to $1.09 billion, in line with estimates. Earnings of 67 cents per share of CA stock was better than estimates of 60 cents, but down 20% from year-ago levels.
Although the current quarter is expected to pan out as planned, the upcoming fiscal year (ending in March of 2016) is now expected to fall short of current expectations. Revenue is likely to fall between 1% and 2%, and though CA upped its per-share profit guidance to somewhere between $2.45 and $2.52 for next year — still 14% and 17% weaker than the current year’s levels.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
