It was neither tricks nor treats for Wall Street today. With no major economic or earnings news to shake things up, the S&P 500 was content to do next to nothing. The close of 2,126.15 was only 0.26 points below Friday’s last trade.
Not every stock was stuck in neutral on All Hallow’s Eve, however. Zimmer Biomet Holdings Inc (NYSE:ZBH), Baker Hughes Incorporated (NYSE:BHI) and Centurylink Inc (NYSE:CTL) dished out some terrifying performances.
Here’s a closer look at what spooked each name.
Centurylink Inc (CTL)
Telecom company Centurylink announced on Monday it would be acquiring rival Level 3 Communications, Inc. (NYSE:LVLT), but if the 12.5% plunge CTL suffered on Monday is any indication, investors are none too pleased with the decision.
The offer values Level 3 Communications at $34 billion, in the form of $26.50 in cash and 1.428 shares of CTL for every share of LVLT. Centurylink would also be taking on LVLT’s debt.
All told, the deal values LVLT at $66.50 per share, or 42% higher than the stock’s closing price from Oct. 26 … the day before the buyout whispers first surfaced. That’s a steep price to pay for the target company and CTL shareholders have made that clear with today’s strong selling.
Baker Hughes Incorporated (BHI)
Centurylink wasn’t the only name to be hit hard on Monday following news of an acquisition. Oilfield services outfit Baker Hughes also fell sharply today, losing 6.3% of its value by the time the closing bell rang.
There was a stark difference between BHI and CTL, however. Whereas Centurylink was the buyer, Baker Hughes was the buyee. General Electric Company (NYSE:GE) is seeking to acquire Baker Hughes in a deal that values the energy outfit at $26 billion. The problem? Today’s 3% dip in the price of oil, for one. The pairing only pays off for GE if the price of crude continues a longer-term recovery. Today’s sharp selloff in oil suggests that recovery effort remains frail.
Also working against BHI shares is the possibility that the pairing may face more antitrust hurdles than initially assumed.
Zimmer Biomet Holdings Inc (ZBH)
Finally, medical equipment maker Zimmer Biomet Holdings unveiled disappointing third-quarter results on Monday morning, and poured salt in that wound with a similarly disappointing full-year outlook.
Actually, the recently completed Q3 was a win in terms of expectations … mostly. The company earned $1.79 per share on $1.83 billion in revenue, versus estimates for a profit of $1.79 per share of ZBH and sales of $1.84 billion. In this market environment though, even a modest miss is significant.
Adding to the impact of the shortcoming was Zimmer’s full-year outlook. Based on its third-quarter numbers and fourth quarter so far, the company now anticipates earning between $7.90 and $7.95 per share of ZBH for 2016, on sales of somewhere between $7.63 and $7.65 billion. Analysts had been collectively looking for a profit of $7.97 per share and a top line of $7.7 billion.
ZBH ended the day at $105.40, down 14%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.