Another day, another reversal. After losing 0.5% on Tuesday, the S&P 500 once again turned things around, gaining 0.43% and essentially climbing back to Monday’s close. Indeed, today’s close of 2159.73 is more or less where the index was trading as of mid-July, underscoring just how annoyingly stagnant things have become.
Some investors would have been just fine with a small gain that carried them back to a long-term breakeven though. Immunomedics, Inc. (NASDAQ:IMMU), Salesforce.com, Inc. (NYSE:CRM) and Verizon Communications Inc. (NYSE:VZ) owners are among them. Here’s the deal.
Verizon Communications Inc. (VZ)
In retrospect, the premise seems more than plausible — Yahoo! Inc. (NASDAQ:YHOO) may not have fully disclosed all of its potential problems and liabilities before Verizon made a winning bid for the struggling web company. Surprised investors sent VZ shares down 1.9% on the heels of the suggestion, as there’s a little less certainty about what the telecom company is getting itself into.
Former Yahoo chief Ross Levinsohn laid it out in no uncertain terms on Tuesday, saying the company knew about hacked e-mails months before it disclosed that to users, and knew the possibility of privacy issues that could stem from its willingness to examine incoming documents e-mailed to Yahoo users, at the request of U.S. government law enforcement agencies.
It’s not clear to what extent, if any, these or any other details may have on the acquisition or how they may impact the value of VZ shares. But, to Verizon shareholders, they present yet another mess the buyer has to figure out how to handle.
Salesforce.com, Inc. (CRM)
Although Google-parent Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) had been the odds-on favorite bidder for Twitter Inc (NYSE:TWTR), cloud-computing customer-contact company Salesforce.com has managed to wiggle its way back into the mix … and CRM shareholders are none too happy about it, judging from Tuesday’s setback for the stock.
Not that it was ever a done deal, but Salesforce had largely been weeded out as a potential bidder. Not only does it lack the cash it needs to get a deal done, the social media venue doesn’t quite align with CRM’s strategy and area of expertise.
As it turns out, that may not matter — Bloomberg reports CEO Marc Benioff may be forging ahead with an offer anyway.
Concerned the company may actually go through with the ill-advised acquisition, traders sent CRM down to the tune of 6% today.
Immunomedics, Inc. (IMMU)
Finally, although it’s not unusual for a small-cap biotech to raise funds in order to continue the development of a drug or an entire pipeline, the timing and scope of the secondary offering Immunomedics unveiled today was a bit of a shocker, sending IMMU sharply lower as a result.
All told, the company intends to sell $30 million worth of IMMU shares, and along with those, each share will be a warrant to purchase another share at $3.00. While the share issuance itself is dilutive, if-and-when IMMU climbs above its current price of $2.49 and moves to or above $3.00 per share, shareholders will face another round of dilution just as big as the upcoming one.
IMMU ended the day down 24% following the announcement.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.