Why Twitter Inc (TWTR), Deutsche Bank AG (USA) (DB) and WebMD Health Corp. (WBMD) Are 3 of Today’s Worst Stocks

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The bulls and the bears seesawed today, but when all was said and done, the S&P 500 was little changed, ending the day at 2,139.12. Most investors are content to remain on the fence until Wednesday’s interest rate-hike decision from the Federal Open Market Committee.

Why Twitter Inc (TWTR), Deutsche Bank AG (USA) (DB) and WebMD Health Corp. (WBMD) Are 3 of Today's Worst StocksNot every stock managed to sidestep trouble on Monday, however. WebMD Health Corp. (NASDAQ:WBMD), Deutsche Bank AG (USA) (NYSE:DB) and Twitter Inc (NYSE:TWTR) each logged sizable losses in the wake of rather alarming news.

Here’s the deal.

Twitter Inc (TWTR)

Despite its debut of live streaming of NFL games receiving rave reviews and the advent of long-length tweeting, TWTR shares were down 4% on Monday on the heels of a double-dose of bad news.

The first wave of selling was spurred by the official materialization of a class action lawsuit, on behalf of TWTR owners, against the company for what is effectively securities fraud. Although it has been brewing for a while, to see it come to fruition paints an alarming picture. Such suits rarely get traction, but they can be an expensive distraction all the same.

Further contributing to the selloff from TWTR was an official report from the company that it was laying off some of its development employees in India. This was another possibility that’s been on the radar for a while, and though it’s only a small portion of Twitter’s total workforce, investors are now wondering if CEO Jack Dorsey will continue to shed the company’s headcount … a sign of weakness and doubt about the future.

Deutsche Bank AG (USA) (DB)

On Friday of last week, Deutsche Bank shares earned a spot on the “Worst 3” list following news that the Department of Justice was mulling a fine of as much as $14 billion, to penalize the bank for its subprime loan sales practices before the 2008 meltdown. Although Deutsche Bank responded by saying it had no intention of paying that much (and it probably won’t have to), any number even remotely close to that figure could prove debilitating for the struggling bank.

Today, like Twitter, DB shares took a hit on not one but two pieces of news.

The first stumbling block was the company’s decision to securitize $5.5 billion worth of loans to boost its capital. Although the maneuver will keep the bank afloat for the foreseeable future, it’s not an ideal outcome — just a necessary evil.

Fanning the bearish flames that burned DB on Monday was new analytical coverage from Credit Suisse, which opened up with a lackluster “Underperform” rating on DB. Credit Suisse explicitly noted the looming fine as well as the recapitalization from Deutsche Bank AG as potential problems.

DB ended the day down 3.1%.

WebMD Health Corp. (WBMD)

Last but not least, WebMD Health saw its stock fall to the tune of 5.7% on Monday, mostly in response to news that CEO David Schlanger is stepping down, but perhaps also on reports that the company was stepping up its stock-buyback plans.

Schlanger’s exit was superficially amicable, though suspicious. While he and the company made a point of saying the decision was a “mutual agreement,” it was also effective immediately — no transition period.

WebMD Health tried to soothe worries by simultaneously announcing it was increasing its stock repurchase program from $15 million to $50 million, but investors weren’t impressed. It read more like an effort to distract them from Schlanger’s exit, further raising suspicions.

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/2016/09/why-twitter-inc-twtr-deutsche-bank-ag-usa-db-and-webmd-health-corp-wbmd-are-3-of-todays-worst-stocks/.

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