The bulls followed through again today, even without the benefit of any significant news. The S&P 500‘s close of 2,119.12 — a 0.33% gain — marks the third straight day of gains, the fifth bullish day of the last six and the eighth daily gain of the last eleven. The result? The S&P 500 is now at multi-month highs, and 15 points away from multi-year highs.
Not every name was knocking on the door of new highs on Wednesday, however. Flexion Therapeutics Inc (NASDAQ:FLXN), Micron Technology, Inc. (NASDAQ:MU) and VeriFone Systems Inc (NYSE:PAY) were all deep in the red, and left out of the rally effort.
Here’s the deal.
Flexion Therapeutics Inc (FLXN)
Flexion Therapeutics shareholders more or less knew it was coming. But, there’s just something about seeing it happen that spooks shareholders. FLXN shares lost nearly 12.4% on Wednesday when the stock proved to be no exception to the norm.
The catalyst in question was news that Flexion Therapeutics would be raising funds via the sale of more FLXN shares. All told, the company aims to raise $77 million by selling 5.5 million newly issued shares.
For perspective, there are only 15.4 million shares in the float and 21.6 million shares outstanding. The issue price for the new shares also works out to a price of $14 apiece, which is near where FLXN ended the day as the market made the adjustment for the impending dilution.
That said, the 40% gain FLXN had logged since May 25 made it a relatively easy target for the sellers to hit. The secondary offering was just the nudge they needed.
Micron Technology, Inc. (MU)
Computer chip maker Micron Technology won’t be sealing the deal on its Inotera acquisition quite as soon as expected, and investors are none too happy about it.
The deal, first announced in December, will give 100% ownership of Inotera to Micron Technology, which currently only owns a third of the target company. Originally anticipated to be complete by early next month, the union has now been postponed for at least a few months. The two companies only noted they expected to post an update in the latter part of this calendar year.
While no snags or potential cancellations of the acquisition have been reported, concerned MU investors still sent the stock down over 3% lower on the unexpected news.
VeriFone Systems Inc (PAY)
Last but not least, as it turns out, not only are the new chip-based credit cards annoying their users, they’re also creating a nuisance for owners of credit card payment middleman VeriFone Systems. PAY lost 24.7% of its value on Wednesday because the migration to an all-new kind of card-processing system isn’t going especially smoothly.
Last quarter, VeriFone Systems earned 47 cents per share, missing estimates of 52 cents. Looking ahead, the company said it now expects to report a profit of $1.85 per share of PAY this year, down from prior guidance of between $2.21 and $2.24 per share. Sales are also going to come up short.
The news inspired a wave of downgrades of PAY … most of them from a bullish to a neutral stance.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
