Stocks ended the week on a modestly bullish note, with the S&P 500 gaining 0.2% to close at 2061 on Friday. The bulk of the damage done by Wednesday’s sharp pullback, however, is still intact.
It wasn’t a bullish day for every stock, however. In fact, for OvaScience Inc (NASDAQ:OVAS), Southern Copper Corp (NYSE:SCCO) and Tesla Motors Inc (NASDAQ:TSLA), Friday was downright miserable.
Tesla Motors Inc (TSLA)
Already in a downtrend since September of last year, things went from bad to worse for Tesla Motors shareholders today. Thanks to today’s 2.8%% tumble, TSLA stock is now hitting new multi-month lows, and is off 37% from its peak price near $291 hit six months ago.
There was no specific catalyst that sent TSLA scurrying. Rather, a collection of well-articulated concerns and doubts came to a head this week, and doled out another round of selling. If there was one news item that had to get the blame for today’s weakness though, it was news that ownership registrations of the Model S in China fell a hefty 45% in February.
It’s a shot across the bow for one of the company’s primary growth initiatives. CEO Elon Musk was looking to China to spur the next wave of revenue growth, so much so that in early February he threatened to fire China’s Tesla showroom and lot managers if sales didn’t improve.
The tactic did not appear to work.
Southern Copper Corp (SCCO)
It’s not clear if the market wants Southern Copper to move ahead with the development of its copper mine in Tia Maria, Peru, or wants the company to cancel the project instead. Either way, investors are fed up with the drama, and sold off SCCO stock to the tune of 3.7% today.
The quick back-story: SCCO wants to begin copper mining in Peru, at Tia Maria. If all goes as planned, work could begin later this month as soon as the company receives its permit. That may not happen if some local citizens have anything to say about it, however. People from the nearby town are protesting the mine, fearful the mine could cause pollution of the areas agricultural valleys. These protests have turned volatile to the point of being violent, and some individuals have been physically hurt.
For a short time on Friday, credible rumors suggested Southern Copper had indeed cancelled the project. Southern Copper CEO Oscar Gonzalez, however, clarified later in the day that the company was indeed still planning on opening the mine.
Unsure of what to believe and now unsure of the risks of opening the mine at all, the stock market clearly didn’t like the uncertainty. Shares are down nearly 6% in the last week.
OvaScience Inc (OVAS)
The good news is, the OvaScience fertility treatment known as AUGMENT works — women who had struggled to achieve successful in-vitro fertilization in the past are more likely to become pregnant using AUGMENT. The bad news is, nobody cares. OVAS shares fell 10% today following Thursday evening’s release of the good news.
One possible explanation is a “buy the rumor, sell the news” mindset. OVAS shares had rallied more than 25% in the few days just before the AUGMENT announcement was made, and were up more than 500% since May of last year. It’s also possible the market simply expected to hear more specifics, thinking this study was wider-scale research than it actually was.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
