Fueled by encouraging economic data outside the United States (and despite lukewarm economic news from within the U.S.), the S&P 500 advanced 1.19% on Monday, reaching a close of 2,104.05. Though that wasn’t a new high for the index, the NASDAQ 100 did reach a record high of 4,707.77 before settling back to close at 4703.92 … also a record.
Not every stock was breaking records, however. Endurance International Group Hldgs Inc (NASDAQ:EIGI), MannKind Corporation (NASDAQ:MNKD) and Visa Inc. (NYSE:V) all skipped Monday’s rally and instead made their way lower. Here’s the deal.
Endurance International Group Hldgs Inc (EIGI)
Philosophically speaking, the acquisition of Constant Contact Inc (NASDAQ:CTCT) isn’t a bad idea. It has been a long-rumored buyout target, with those whispers getting louder as cloud-based services become the norm.
The market is less than thrilled with the fact that Endurance International Group ended up being the name that bought Constant Contact though, either based on the price being paid, the compatibility of the two companies or a combination of both.
All told, Endurance International Group is spending $1.1 billion to acquire Constant Contact, which turned $353 million worth of revenue over the past four quarters into earnings of $18.8 million.
EIGI shares fell more than 16% on the news, mostly fueled by doubts that the pairing would yield much in the way of synergy.
Visa Inc. (V)
Credit card middleman Visa tried to distract V shareholders from lackluster earnings by simultaneously announcing a major acquisition, but the market didn’t take the bait.
Last quarter, Visa earned 62 cents per share on $3.57 billion in revenue. The top line was better than the roughly $3.6 billion analysts were calling for, but profits were a penny short of the 63 cents per share of V analysts had anticipated.
The outlook for the coming fiscal year wasn’t exactly compelling either. Revenue growth should come in at a rate between high single digits and low double digits, leading to a profit of somewhere near $2.96 per share of V. That outlook puts some pressure on the average outlook for a profit of $3 per share next year.
Visa also announced it would be buying Visa Europe for $23 billion, but unable to get past the tepid quarterly results and outlook, V shares fell 3% on Monday.
MannKind Corporation (MNKD)
Last but not least, MannKind shares fell nearly another 4% today, extending what’s now become a three-day, 16% pullback.
The prod for the selloff was a report posted on Thursday that MannKind partner Sanofi SA (NYSE:SNY) wasn’t seeing any real demand growth for inhalable insulin Afrezza. In the third quarter, Afrezza only contributed €2 million to Sanofi’s top line, roughly in line with Q2’s total.
MNKD shares still have their vocal supporters, but in light of some sales projections of more than $5 billion per year, Afrezza — and by extension, MNKD — have been indisputable disappointments.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.