Looking for any reason to follow through on Friday’s bullishness, the market pegged Japan’s election results as a good-enough reason today. Prime Minister Shinzo Abe is now in a strong position to implement a largely expected stimulus package, which will likely create a global ripple effect. The S&P 500‘s close of 2137.16 was 0.64% better than Friday’s last level for the index.
Not every stock jumped on the bandwagon, however. Netflix, Inc. (NASDAQ:NFLX), Stamps.com Inc. (NASDAQ:STMP) and Twitter Inc (NYSE:TWTR) and just couldn’t get anything going.
Here’s the deal.
Netflix, Inc. (NFLX)
Netflix ended up falling victim to a pessimistic expert opinion today. Specifically, Wedbush Securities reiterated its “Underperform” rating on NFLX today, urging shareholders to sell their stake before the company’s Q2 numbers are unveiled.
Analyst Michael Pachter opined:
“While we don’t think that Amazon will attract many current Netflix customers, we think it is foolish to assume that new SVOD customers will favor Netflix over Amazon every time. We acknowledge that Netflix has the much more powerful brand for SVOD, but we are confident that with its new standalone service, Amazon declared war on Netflix. We expect Amazon to eventually launch a new branding strategy of its own to more effectively compete with Netflix.”
NFLX ended Monday with a 2.5% loss.
Stamps.com Inc. (STMP)
Not that Stamps.com shares were “must-haves” to begin with, and not that anything revealed today was new, but, an alarming spotlight was put on the company today that made STMP even a little more difficult to justify owning.
Blame news website The Capital Forum for today’s 8% selloff from STMP. A contributor at the site pointed out that the United States Postal Service could end its agreement with Stamps.com with just 30 day’s notice if the government-sponsored organization uncovered any sort of abuse. The Capital Forum also pointed out that dilution could be in the cards, if the company opted to issue new STMP stock to dish out performance-driven bonuses.
Although there’s no particular reason to expect either possibility will take shape, with new seeds of doubt planted, STMP was among the worst of the worst performers on Monday.
Twitter Inc (TWTR)
Last but not least, just when it looked like Twitter might finally make its way out of a funk, something comes along and pulls the rug out from underneath the rally. For better or worse, TWTR owners can’t be terribly surprised at this point.
SunTrust did the deed today, downgrading TWTR from a “Buy” to “Neutral” due to all-too-familiar concerns … a lack of growth, and an inability to monetize the platform effectively. SunTrust still believes Twitter is a company with potential for success and growth, but wants to see more tangible evidence it can make good on its promise.
Monness, Crespi, Hardt & Co. analyst James Cakmak isn’t quite as hopeful, saying today:
“What is Twitter? Quite frankly, we don’t believe that question has been answered. Barring any changes, Twitter was, is and will continue as a niche product.”
Cakmak also downgraded TWTR from the firm’s equivalent to a “Buy” to a “Hold.” TWTR ended the day down 2.0%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
