Despite an extra day to think things over this past weekend, traders didn’t come back to the table any more decisive than they left it on Thursday of last week. By the time the closing bell rang, the S&P 500 was at 2037.05, up 0.05%.
Nevertheless, there was never any doubt about the fact that the bears are anything but fans of Fitbit Inc (NYSE:FIT), Pandora Media Inc (NYSE:P) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Those three names were among Monday’s biggest losers.
Here’s what traders need to know.
Fitbit Inc (FIT)
Don’t look for a specific reason Fitbit shares were down 7% on Monday. You won’t find one. Rather, FIT shares are still in a pullback that got rolling last week for a couple of different reasons.
The lesser of those reasons may be the fact that the bigger downtrend put into motion in September of last year has resumed after short positions on FIT — bets that it will lose value — were unwound last week when the bears locked in their profits by buying the stock back … action that pushes the value of the stock higher.
The more daunting of the reasons FIT is now down nearly 14% from last Tuesday’s high has to do with news from rival smartwatch maker Pebble.
Pebble is laying off 25% of its workforce, suggesting the same smartwatch mania that once catapulted Fitbit higher is already slowing down.
Pandora Media Inc (P)
Pandora Media has a new CEO, and judging from the 12% plunge P dished out on the wake of the news, shareholders are less than thrilled about it.
Pandora co-founder and former CEO Tim Westergren has been chosen to replace Brian McAndrews as the company’s top executive.
The news came as a bit of a surprise, and the changes were effective immediately. Aside from the red flags such rapid personnel replacements wave, P investors may also be questioning the timing of McAndrews exit. The company was starting to get some measurable traction under McAndrews’ ambitious leadership, and this move could up-end the fragile turnaround effort. It also likely means the rumored buyout doesn’t even have a chance of happening now.
Valeant Pharmaceuticals Intl Inc (VRX)
Finally, just when you think that everything bad that could happen to Valeant Pharmaceuticals has happened, you’re proven wrong.
The latest in the sordid saga: Outgoing CEO Mike Pearson, who had only stepped back to the helm for a few days after taking several weeks off for medical reasons, has been subpoenaed by the United States Senate to discuss sharp drug-price increases his company imposed in recent years.
The subpoena isn’t a criminal accusation; the Senate Special Committee on Aging simply wants to know more about how and why Valeant and its peers often times more than double the price of a therapy once they acquire that drug. All the same, VRX shareholders understandably think it looks bad, and could lead to rules that undermine the company’s M.O.
VRX ended the day down a little more than 7%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
