Enthused this morning by the 1.2% improvement in retail spending reported for May, investors were happy to tack on gains to yesterday’s big bullish moves. It wasn’t strength built to last, however. By the time the closing bell rang the S&P 500 whittled down its gain to a mere 0.17%.
It wasn’t a modestly bullish day for all stocks, though. In fact, for Chesapeake Energy Corporation (NYSE:CHK), GoPro Inc. (NASDAQ:GPRO) and Yahoo! Inc. (NASDAQ:YHOO), Thursday was downright miserable.
Yahoo! (YHOO)
Don’t look for a specific reason Yahoo! shares tanked today. Rather, just know that today’s near-3% selloff from YHOO is just part of a much bigger downtrend that’s — unfortunately — starting to pick up steam due to some serious unanswered questions regarding the organization’s viable future.
Long story short, YHOO investors are increasingly losing faith in relatively new CEO Marissa Mayer. Her moves are bold and her willingness to try things (or cancel projects) is endearing. They’re just not effective. Revenue growth continues to be a struggle.
Now starting to see the writing on the wall, investors’ doubts are finally weighing down on YHOO. The stock has fallen more than 10% since April, and was close to logging a new multi-week low today.
Chesapeake Energy Corporation (CHK)
Just for the record, Chesapeake Energy Corporation wasn’t the energy sector’s biggest loser today. It did, however, dish out a great deal of pain to the most shareholders, in that CHK was the highest-volume loser among oil and gas stocks on Thursday. When all was said and done, shares finished the day down nearly 5%.
Part of the prod for the pullback may have been the dip in the price of oil and natural gas. Crude oil fell 1.16% today, while natural gas fell 2.0%. The bigger reason CHK moved considerably lower on Thursday, however, stemmed from a downgrade by Oppenheimer. Analyst Fadel Gheit lowered Chesapeake Energy Corporation from an “outperform” to “perform.”
Gheit specified:
“Based on the future strip benchmark oil and gas prices, we expect CHK to report losses of $544M this year and $833M next year, or $0.48/share and $0.84/ share, respectively. We expect operating cash flow of $2.1B this year and $1.5B next year.”
GoPro (GPRO)
This week hasn’t been a fun one for GoPro shareholders. Still basking in the glow of a 56% runup from March’s low, traders were caught off guard by this week’s sizeable pullback. Factoring in today’s 3% tumble, GPRO shares are now down more than 8% from Monday’s peak.
The bearish ball started rolling simply because GPRO shares were overbought and the profit-takers were getting anxious. The selling flames were fanned yesterday, though, after Citi reeled in its demand outlook for wearable action cameras.
Citi analyst Jeremy David described the problem to GoPro investors as “[action camera] content fatigue,” pointing out how the number of U.S. consumers who plan on buying such a camera had fallen from 7% a year ago to 5% now. Today’s fall from GPRO suggests the market sees David’s point about the manic phase of the product’s lifecycle now coming to a close.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
