Why AbbVie Inc (ABBV), GrubHub Inc (GRUB) and LendingClub Corp (LC) Are 3 of Today’s Worst Stocks

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Between surging inflation and a strong uptick in housing starts and building permits, Janet Yellen was given another batch of reasons to accelerate rather than decelerate her rate-hike timeline. Inflation grew at its fastest pace in three years last month, even if the bulk of the increase was driven by rising but still-low gasoline prices.

Spooked investors sent the S&P 500 to a close of 2047.21, down 0.94% from Monday’s close.

Why AbbVie Inc (ABBV), GrubHub Inc (GRUB) and LendingClub Corp (LC) Are 3 of Today's Worst StocksLeading the way lower were AbbVie Inc (NYSE:ABBV), LendingClub Corp (NYSE:LC) and GrubHub Inc (NYSE:GRUB). Here’s what went wrong for each.

AbbVie Inc (ABBV)

Drugmaker AbbVie thought its rheumatoid arthritis drug Humira was all its own, with no legal threats on the horizon. As it turns out, AbbVie was wrong.

On Tuesday, biopharma company Coherus Biosciences Inc (NASDAQ:CHRS) announced the U.S. patent office was reviewing a claim that would allow it to make a biosimilar version of the Humira.

The drug’s patent doesn’t expire until 2025, but through a technicality unique to the way drug is created and works, Coherus may be allowed to begin making its own version of the drug well before the patent expires. At stake is a sizeable piece of the $14 billion worth of annual revenue Humira currently drives.

ABBV closed down by more 3.5% today.

GrubHub Inc (GRUB)

Food delivery outfit GrubHub didn’t do anything wrong to deserve the near 8% stumble its stock took today.

Indeed, the company just upped its Q2 and full-year revenue guidance to reflect the recent — and smart — acquisition of LAbite, which actually served to strengthen a budding rally effort from GRUB. Rather, GRUB became yet another victim of Amazon.com, Inc. (NASDAQ:AMZN), which is stepping further and further into GrubHub’s food-delivery turf.

On Tuesday morning, Amazon announced it would begin offering restaurant delivery services in Manhattan and Dallas, bringing the total number of meal delivery markets Amazon serves to ten, and counting.

The expanding footprint of Amazon’s food delivery offer poses a serious threat to companies like GrubHub, as the company can afford to offer its service for free to Prime Customers, and then recoup any such losses on the service by monetizing those customers in other ways.

LendingClub Corp (LC)

Finally, anyone who thought the LendingClub drama ended when CEO Renaud Laplanche stepped down following a violation of the company’s integrity policy was mistaken. A whole new batch of drama was drubbed up today, sending LC shares more than 8% lower for the session.

No accusations have been made yet, and the company didn’t explain the nature of the request. The mere fact that the Department of Justice has subpoenaed certain records kept by the company, however, is a major red flag for LC shareholders.

Most plausibly, the records in question pertain to reports that loans sold to buyers weren’t of the credit-quality they were said to be. That discovery is the same reason Laplanche removed himself as the company’s chief executive.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/05/lc-grub-abbv-are-3-of-todays-worst-stocks/.

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