It was touch and go most of the day, but the bulls were doing most of the pushing and shoving by the end of the session. The S&P 500 ended the day at 1868.99, up 0.52%.
It wasn’t a bullish day for everyone, however: Netflix, Inc. (NASDAQ:NFLX), Lifelock Inc (NYSE:LOCK) and Deutsche Bank AG (NYSE:DB) shareholders found themselves on the wrong side of the table on Thursday. Here’s why.
Netflix, Inc. (NFLX)
The market ended up seeing the glass as half-full for Netflix following earnings, but the battle was hard-fought. A few too many red flags started to wave for NFLX on Thursday, leading investors to change their tune and send the stock more than 5% lower.
Perhaps the most alarming of those red flags were confirmed reports that Netflix would be upping its monthly fees (even for long-time subscribers who had thus far sidestepped price hikes).
Although that official word came on Tuesday, reports from Wednesday suggesting the important U.S. market was nearing saturation gave the market some time to connect the dots.
The proverbial death blow for NFLX may have been news that its plan to expand in Indonesia (a market of 250 million people) was going to be a major logistical hurdle.
Deutsche Bank AG (DB)
How does the old saying go? When it rains, it pours? That was certainly true for Deutsche Bank today, after the company posted disappointing results for the previous quarter, with analysts warning DB shareholders that things could get worse before they get better.
While it’s unofficial thus far, Deutsche Bank warned that the soon-to-be-reported 2015 bottom line would be around a record-breaking $6.7 billion loss, primarily resulting from legal headaches associated with its manipulation of Libor rates.
Looking ahead, the pros aren’t optimistic that DB’s heavy litigation costs are going away anytime soon. Citigroup expects 2016’s portion of an ongoing legal battle to cost $3.6 billion, which means a dilutive fundraiser is on the way. Barclays agrees Deutsche Bank is going to run into capitalization problems.
DB ended the day down 4%.
Lifelock Inc (LOCK)
It’s not clear if the 2015 guidance Lifelock gave after Wednesday’s close was the cause for the 10% pullback from LOCK, or if it was due to the news that CEO Todd Davis was stepping down. Probably a little of both.
The final numbers aren’t tallied yet, but as of the results so far, Lifelock believes it will earn between 62 and 63 cents per share of LOCK on revenue between $586 million and $587 million in fiscal 2015. That’s in line with the 62 cent per-share profit and revenue of $584.9 million the pros were calling for; though, for many, a mere “in line” is a shortcoming.
Fanning the bearish flames was news that President Hilary Schneider will become CEO, replacing Todd Davis, who will become the executive vice chairman of the board. While the repositioning is amicable, any management disruption opens the door to potential stumbles.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
