Building on last week’s measurable but modest bullishness, the buyers took charge early on Monday to get the new week started with a bullish bang. The S&P 500‘s close of 2190.15 today was 0.28% better than Friday’s last trade.
It wasn’t a winner for all stocks, however. Endo International plc – Ordinary Shares (NASDAQ:ENDP), Mid-America Apartment Communities Inc (NYSE:MAA) and Salesforce.com, Inc. (NYSE:CRM) were all in the red today following concerning news.
Here’s the deal.
Salesforce.com, Inc. (CRM)
Finally, not that it was soaring to begin with, but a small dose of bad news sent lethargic shares of salesforce.com down 3.3% to start the new trading week.
Piper Jaffray and OTR Global both came to the same conclusion about CRM. After a channel check, both determined demand for the company’s software-as-a-service was a bit lighter than usual for the recently completed quarter.
Piper Jaffray analyst Alex Zukin commented “Our checks indicate a somewhat lighter new business quarter than prior periods with typical Q2 seasonality combining with a few one-time factors,” while OTR Global warned of “weak mid-tier partner checks that fell below expectations.” OTR Global also lowered its rating on CRM, from “Positive” to “Mixed.”
Endo International plc – Ordinary Shares (ENDP)
Just one trading day after Mizuho upgraded it to a “Buy,” Endo International shares tumbled 3.9% after the biopharma company announced it was withdrawing its new drug application for abuse-deterrent painkiller Opana ER.
Opana ER has already been approved by the FDA for certain indications. Endo International was seeking to add an ailment to its list of approved uses, though. After discussing the matter with the agency, Endo opted to pull back and gather more data so it can resubmit the application again at a later time.
Opana ER is crush-resistant, making it difficult to abuse the opioid-based painkiller. The U.S. painkiller market alone could be worth nearly $18 billion by 2021.
Mid-America Apartment Communities Inc (MAA)
Finally, every merger or acquisition has a winner and a loser, and the partnering of Post Properties Inc (NYSE:PPS) with Mid-America Apartment Communities — with the latter buying the former — is being viewed as a great deal for PPS shareholders, and a lousy one for MAA investors.
Multi-unit real estate investment trust company Mid-America Apartment Communities announced on Monday it would be spending $3.88 billion to acquire smaller rival Post Properties as part of an all-stock deal. Once consummated, current Post investors will own approximately 32% of what will be a $17 billion REIT.
Oppenheimer analyst Steve Manaker likes the deal, saying:
“First, the strong market overlap should give MAA added depth. Second, we believe assets are 10-15% cheaper in the public than private market. Third, PPS’s same-store operating metrics have lagged MAA’s recently. Finally, we believe MAA will successfully integrate the acquisition having cut its teeth with the 2014 acquisition of Colonial Properties.”
The market isn’t buying it though, sending MAA down nearly 5% for the day.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
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